The limitations are not as bad as you have described, from my perspective at least. I use my own MP3s ripped from my CDs, so there is no problem in using those MP3s on the player. Have not tried buying digital music online from Zune Marketplace or any other sources yet, so can't comment on that. The software only allows you to transfer music from PC into the player but not get music out of the player onto the PC. Sounds reasonable to me because of copyright concerns, and does not bother me because I don't plan to share my MP3s with others. Anyway someone already found a registry hack to get around that limitation.
As for wireless sharing, music can be transferred wirelessly from one device to another but can only be played 3 times on the receiving device, and cannot be re-transferred or relayed to a 3rd device. Again, does not affect me as that is not the main reason I bought it (even though Microsoft thinks that is the killer feature).