Ok, I just gotta say, for those complaining about the Nano.
First, the lack of a clickwheel/physical buttons. I just went ot Apple's site to make sure, but does everyone complaining about this realize that it still supports the remote on the headphones?! There is your buttons for when you are walking/excercising and don't want to look at the nano. Personally, I find the remote a much better thing for that kind of thing anyways over the click wheel (it's one of the two reasons I like my fifth gen over my 3rd gen nano. Otherwise, I miss the form of the 3rd gen nano that fit in a pocket better. I really don't see why people like this stick form which tends to stick into your leg if you don't place it just right in your pocket and doesn't fit in the small pocket of my safety vest I wera on my motorcycle so well).
2nd, lack of video playing ability. The only reason I could even see buying the nano for video capability is if you wanted a cheaper ipod touch. As some one said, it's not a touch. if you want video, spend a little extra and get the touch. It will do this far better than the nano anyways with a much better screen for it. Sure, it's neat playing video on my nano. Something I've only done when the nanos were new to me and then never used them for that again. Maybe if I didn't have a laptop or an iphone would I use it. But it's more of a neat extra for a toy that I never even use than something I'd say is essential to the nano.
3rd. Lack of being able to record video. Personally I would have rather it taken pictures anyways

. Once again, a feature that I think is nifty but not really essential. The ipod touch once again is probably better for htis anyways (runs iOS so you can even get apps to edit those videos you shot and you can see them better).
Really, 2 of the three main complaints I see are from people I suspect would do better off with a Touch anyways. The Nano shouldn't be competing with the touch. It will lose and it is not a good proposition to create competition for your other products.
And people saying that small size doesn't matter. Um, yes it does. If size isn't that important to you, once again, get a Touch! IT's not that much bigger than the fifth gen nano and it will do far more. So why are you even in the market for a Nano if size isn't important? That's the biggest reason to get a nano or shuffle. For those who want a music player that really stays out of the way.
I'm glad they made it smaller! It honestly needed to get smaller. The third generation had a much better form and then they went back to the more awkward stick form that doesn't really fit in pockets well (or really sit on your arm well). The touch screen was a good compromise to make it smaller (seeing as it supports the remote in the headphones. Without that I'd fully agree getting rid of hte clickwheel was bad).