I placed an image of the existing Nano over this new design. Assuming the control wheel is the same size (big assumption), you can get an idea of the size of the new one:
Wow the screen size looks huge in comparison! They do look kind of stubby, but not as bad as I thought they would look.
I don't believe that Apple is not going to dump the current Nano form factor anytime soon.
In the back of my mind, I seem to remember a similar picture some years ago concerning the so called video iPod.
Thanks for the enlarged pic.