iPod Is it feasible to put a 128gb chip in a Nano?

Not very. The chip is mounted on the board in such a way as to make it next to impossible to remove. I'm sure that it can be done, but only with highly specialized, terribly expensive equipment.

The image here is of the logic board of the 7th generation iPod nano; the storage is the big honker down on the bottom.

Not only is it next-to-impossible to solder a larger capacity chip there, the firmware and hardware likely won't recognize a larger amount of flash memory than it was designed to work with.

For example, I have a first-gen MacBook Pro. It can only handle 2GB of RAM. If I put in 4GB of RAM, the system will only see the first 2GB. It's a hardware limitation with its Core Duo processor.

Right now, the highest-capacity single-chip flash chip is 64 GB. So, no. You can't put 128 GB in a nano.

Even if there was, surface-mount soldering is a VERY tricky operation. Yes, there are people that could do it at home, but they have specialized equipment. This isn't a "do it with your run of the mill soldering iron" kind of job.

As for the "would it recognize it"? I don't know. Apple doesn't have any reason to have put IN the code necessary to recognize such a chip, but most storage code is pretty generic - and flash chips are "mass storage" chips, so it very well might work.

The problem with RAM, such as the MacBook Pro, is with system memory, not storage. Two completely different things. You can go ahead and put a 1 TB drive in a first-generation MacBook Pro no problem, or even a 768 GB flash drive. The RAM issue is system memory, not storage. Same with the iPod. The hard-drive-based iPods can have their storage replaced without too much difficulty, since it isn't soldered in.

Plus the firmware probably wouldn't address it.

If you have to ask, you can't do it.