The Microsoft (MSFT) Zune is looking better than ever today following news that the iPod nano from Apple (AAPL: sentiment, chart, options) is a potential fire hazard. Japan's ministry of economy, trade, and industry reported that 2 minor fires were caused this month in Tokyo by overheating iPod nanos. Earlier this year, Japanese officials launched an investigation into the portable music players after another nano sent out sparks. In total, 14 similar incidents have been reported in the country, with 2 minor burn injuries resulting.

Ministry official Hiroyuki Yoshitsune noted, "Our ministry told Apple to improve its technological development and probe the cause of the incidents so that similar incidents do not happen again." So far, no response has been issued by Apple.

In other Apple news, the company is granting a free 60-day extension on its MobileMe service. The faulty application has drawn plenty of complaints and criticisms from users, and even Steve Jobs called it a "mistake" to roll out the application. The free extension strikes me as an odd move; kind of like when someone says, "This tastes terrible! Try it." But, hey, I guess it beats a combustible iPod nano...