That only's necessary if the system can detect if its on it's side and adjusts the menu for the landscape view. But, seeing that it's a Nano it likely won't move the menu depending on how you hold it.
So it's allowed to have a static wheel. Whilst you're watching a movie or TV show on an iPod the next/prev buttons just move through chapters (or finishes the film). Volume up will always be a clockwise turn and down will be anti-clockwise.
The only problem is fast forwarding through a film which is a small price to pay to get a non-fat iPod Nano.
What about an adaptive clickwheel (that's not really a clickwheel). The donut part of the wheel could be some sort of touch screen, the centre could stay as a button (or become part of the touch screen) then when the accelerometer senses the turn, the clickwheel adapts accordingly. Think of these new Samsung phones with the touch pannels.
Or we could (hopefully) all be wrong and apple will give us something nice.
OR... this entire product is actually way smaller and combines the shuffle and nano. the screen is 1 inch, the clickwheel is the same as current nano. You use it on its side?? Dock connector on the right side, phone jackand hold button on left?? No video capability. Then create a new nano?? Or a smaller touch??