As flash storage goes up and prices go down, the Nano can begin to approach the 16 and 32 gig size. This makes the Nano an attractive and small form factor iPod. I think Apple may elect to keep the existing video iPod in a 60 or 80 gig size for say $299 or $349 for those who want larger storage but the original functionality. Then they can offer the touch-screen iPhone like iPod with Music, Photo and Video, utilizing coverflow and turning over album covers to see song lists, etc, in a slightly thicker than iPhone variant with no phone like functions, no browsing, no mail for $399 or $449, probably using a flash/hdd mix.