Hmm. A few thoughts.
First, the "candybar" reference you make is quite apt: this looks a lot like the LG Chocolate. Which, of course, was designed to look like an iPod, so duh. But, I foresee market confusion. At least the buttons here will have some response to them (I hope!).
Second, I'm not sure about the slide-out idea. I like the idea on many cell phones as a way to keep buttons from being pressed accidentally, but greatly prefer Apple's iPod "Hold" switch over a physical drawer or "key lock" mechanism. With the music buttons so exposed, seems we'd still need a "hold", and it'd be silly for that to only apply to half the device. More, though, I worry about how flimsy the device will feel with the scroll wheel "slid out". Granted, that seems infinitely better ergonomics than the keyboard itself sliding out (can slide open and dial with one hand in one smooth movement without re-adjusting phone in hand). But, still, I worry about the likelihood of the wheel "drawer" snapping off. I hate to see iPods in such pain!
Third, what about cases? My cell phones without cases always end up looking like crap. I wouldn't want a nice shiny black iPhone to be all beaten up a week after I got it. How would a case work with a slide-out drawer? Are we stuck using socks?
I'm assuming that the non-numeric controls (answer the phone, hang up, you know, the little not-so-important functions) are also in the drawer. Does that make sense for answering the phone while on the go?
Finally: size? I know, most of the world doesn't have American-size Big Mac fingers. Still, I can't imagine using a keypad small enough (both width/height and depth) to fit under the scroll wheel of a nano. If you make it that small, the buttons have to be really bulby and stiff (see Treo); otherwise you just hit the wrong one too often.