Finally a leap in the right direction,
September 20, 2008 I'm not sure where to start exactly, since there seems to be an almost endless amount of good I can say about this little wonder.
Let's start with the first thing I love about it; NO MIRRORED ALUMINUM BACKING. Now now, I know that this is a huge thing for some people since it's sort of Apple's signature and all, but I'm so happy that it's not there since all it does is get scratched up and ugly anyway. Instead it's replaced by a wrap-around brushed aluminum design which doesn't scratch nearly as easy and will stay looking great for years to come (at least my shuffle of the same design has).
Another thing I noticed about the player is an almost silent noise floor. For the not so geeky crowd, the noise floor is the level of audible background noise caused by the unit itself (that hiss you hear when music isn't playing). Although most people never notice it because they use the standard Apple headphones, it becomes more noticeable with higher end headphones that possess a greater frequency range. Again, this may not seem like much, but to an audiophile like me you can't begin to put a price on it.
I'll cut in real quick though with something I'm not too crazy about that Apple is promoting the hell out of right now so I can get it out of the way, and that's the "Genius" feature. The problem is that "Genius" is more "Retarded" than anything else... I wish I could think of a better way to put it but I really can't. You see, when you activate Genius, it's supposed to find similar songs on your iPod or in your library for you to listen to and also recommend other music you might like. The problem is though that there appears to be little to any rhyme or reason to how it selects these songs... For example, activating Genius while listening to Grow Up and Blow Away by Metric (Alt with a soft rock overtone), created a playlist with things like Kill the Poor by The Dead Kennedys (hardcore punk rock). It got it right now and then but was usually the difference between night and day. It's not a feature you're required to use to play your music though so no harm done.
Also new to the nano is the use of accelerometers like those present in the Touch and iPhone, allowing you to tilt it to watch a video or enter cover flow to browse albums quicker. You can also give it a quick shake to enter shuffle mode, but this isn't as useful as the other features I just mentioned... If the games that are already present on the unit are any indication however, Apple looks to be planning to use this feature extensively and to its full potential in the future.
The biggest thing that I feel will draw people in however is how big this player isn't. It's roughly the width and length of two sticks of gum sitting next to each other, and only about as think as if there were two more stacked on top of them. Making it incredibly convenient to carry with you virtually anywhere. And at only $150 for an 8GB and $200 for a 16, it's becoming harder to pass these up even with the stiff competition from other competent companies like Sandisk (Sansa) and Creative (zen).
Don't feel like it's a total overhaul though, features that haven't changed are plenty as well.
The overall interface is the same, and can have a bit of a learning curve if you use the brute force figure it out as you go approach (this was my fist actual iPod myself, since my previous was a menuless shuffle) but can be easily used to it's full potential by logging onto the Apple website for the full manual.
The docking port looks the same as any of the other iPods, but that doesn't always mean it's compatible with various players. I don't own any docks myself, so I can't comment personally. Although I'm taking a wait and see stand on this though, as many docks seem to have compatibility issues as each generation comes and goes.
Overall it's a wonderful little music player that surely wont disappoint, from the casual listener to the hardcore music junkie, it's a must to be considered for anyone in the market.
Update 10/14/08: I've noticed as I use the player more that occasionally the click wheel has a tendency to "lag" a bit behind or is slow to respond. Hopefully this issue will be fixed in a software update though, since from the way it happens I don't think it's a hardware issue. In any case, it isn't a huge deal unless you plan on playing a ton of games. But that doesn't mean that it wouldn't still be nice to have it fixed.
Apple iPod Nano
cover flow IS turn off able, 
