HandHeld Entertainment's ZVUE 250, its Next Generation Entry-Level Personal Media Player, is Now Shipping and Available for Purchase Online and in Stores.

Built-in rechargeable lithium-ion battery and thinner/lighter design highlight new features in the next generation ZVUE that is supported with more than 5,000 premium videos available on ZVUE.com

SAN FRANCISCO -- The ZVUE[TM] 250, the next generation value-priced personal media player (PMP) from HandHeld Entertainment[TM] (Nasdaq:ZVUE) (Nasdaq:ZVUEW), is now shipping and is available for purchase online at Amazon.com and Wal-Mart.com and in selected Wal-Mart stores throughout the United States.

With a manufacturer's suggested retail price of $99.95, the entry-level ZVUE 250 PMP features a 2.5-inch active matrix backlit screen and supports videos running at up to 30 frames per second (fps). The ZVUE 250 also features a secure digital (SD) slot (and ships with a 128MB "starter" SD card), a rechargeable lithium-ion battery and is compatible with Windows Media Player 10 with Microsoft's secure Digital Rights Management (DRM) and supports both Windows Media Video (WMV) and Windows Media Audio (WMA) formats with DRM for music and video download services. In fact, the ZVUE 250 is the only PMP priced at under $200 that supports WMV with DRM.

"The ZVUE 250 is our next step in creating a family of value-priced personal media players that everyone can easily afford and enjoy right out of the box," said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. "Many companies are making overpriced and overly complicated PMPs. We believe that consumers will love the fact that they can easily enjoy our durable and affordable ZVUE 250 by using our ZAPP[TM] Media Manager software to easily download videos from ZVUE.com[TM] or our new sites for hilarious user-generated content: Dorks.com[TM], FunMansion.com[TM] and YourDailyMedia.com[TM]."

Additional ZVUE 250 Specifications

The ZVUE 250 utilizes a more compact and sleek design than the previous ZVUE model. Additional specifications include:

* Up to six hours of battery life on a single full charge,

* An AC adapter to charge the device,

* Two earphone jacks to allow sharing with a friend,

* A USB port for easy uploading of digital content,

* A 90-day limited Manufacturer Warranty,

* Audio support for the following file formats for audio playback: MP3, WMV, WMA (with DRM), OGG and MP2,

* Picture support for the following file formats for image playback: JPG, BMP,

* Video support for the following file formats for video playback: AVI, ASF, Xvid, MPEG4, WMV (with DRM),

* Measurements: 4.33- x 2.91- inches x 0.8-inches, and

* Weight: Approximately 5.2 ounces.

"This holiday shopping season, a lot of families will have children asking for a PMP of their own," Oscodar said. "There's no reason for families to spend hundreds of dollars for just one PMP when they can purchase the ZVUE 250 for around $100. We are committed to making our products affordable, available from retailers like Wal-Mart and Amazon.com, and thanks to our 'open solution' approach to portable digital video with ZVUE.com, ZVUE 250 owners have access to a lot of the Web's best legal content as well."

The first two independent reviews of the ZVUE 250 agree with Oscodar's assessment of the value delivered by the ZVUE 250.

For example, Joe Nuvolini at ComputorEdge Online rates the ZVUE 250 at four out of five worlds and in his 12/15/06 review describes the ZVUE 250 as

* "a great gift for Christmas,"

* "not complicated to use,"

* "Overall, it is a great unit," and adds

* "if you have been looking for a unit that is simple to use, you'll love it."

(The complete ZVUE 250 review can be found online at http://webserver.computoredge.com/editorial/prg/online.mv?zone=NA.)

By comparison, Sari Kent at TheCelebrityCafe.com describes the ZVUE 250 as a "video player, with a nice interface, great screen and a few other features." Kent further writes in his 12/19/06 review, "If you are in the market for an MP3 player that does more than just play music then the Zvue 250 is just what you need!" (The complete ZVUE 250 review can be found online at http://thecelebritycafe.com/guide/1355.html.)

HandHeld Entertainment has more than 5,000 videos available for purchase on ZVUE.com today out of more than 11,000 video selections it has under contract, as well as thousands of free user-generated and user-submitted videos on HandHeld's network of Web sites. These selections include premium music videos, anime features, television shows, movies, cartoons, independent films, documentaries, news, entertainment and sports programs from companies ranging from Sony BMG to IMG Media and from Canadian Broadcast Corp. to Fun Little Movies.

About HandHeld Entertainment, Inc.

HandHeld Entertainment is a digital-media-to-go company with a family of mass-market portable media players priced at mass-market prices as well as its own online video content store. Its ZVUE portable media players are available for purchase online and in retail locations across the U.S., while portable video lovers can visit HandHeld Entertainment's premium video content store at www.zvue.com to buy pay-per-download videos. Customers can also download free user-generated videos and other media from the Free STUFF! section of ZVUE.com, as well as from Dorks.com, FunMansion.com and YourDailyMedia.com, wholly owned subsidiaries of HandHeld Entertainment. HandHeld Entertainment's common stock and warrants are traded on the NASDAQ Capital Market (ZVUE, ZVUEW) and Boston Stock Market (HDE, HDEW). For more information, visit www.hheld.com/ir or call 415-495-6470.

HandHeld Entertainment, ZVUE, ZVUE.com, Dorks.com, FunMansion.com and ZAPP are trademarks of HandHeld Entertainment. All other trademarks are property of their respective owners.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of various factors including the ability of the company to successfully commercialize its new technologies as well as risk factors set forth from time to time in HandHeld Entertainment's filings with the United States Securities and Exchange Commission, including Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K and other reports filed by the company with the SEC. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. As a result, investors should not place undue reliance on these forward-looking statements.