Yesterday my downloads through zune music pass were automatically failing. I soon discovered that this was due to an inability to sign in. It was an automatic failure upon attempting to sign in and the mysterious "unknown error" message appeared. I contacted microsoft support and we worked through a couple of troubleshooting options including restarting the program (has worked in the past), reinstalling, attempting access from another device, etc. We arrived at a dead end and I was directed to call microsoft at the 1-800 number.
But before I did that, I searched around internet forums and soon found something that worked, even though I didn't think it would. Apparently the zune software is dependent upon accessing Internet Explorer during sign-in, even if you don't use that broswer (I've never used it on my laptop). Open Internet Explorer, open settings (if you have an old version select advanced settings), find the button that says something like Restore Default Settings and press it. Fire up the zune software and you should have no more problems. Since nothing changed on my end, I assume that internet explorer or the zune software had some kind of update that affected sign-in. Maybe from a windows update.
Tech support appears to be unaware of both the issue and the solution. I hope this helps everyone out.