I own a 4gb ipod nano and I'm satisfied so far.
The following is to my experience after 1.5 months of usage.
Click-wheel, 'smart playlists', iTunes integration, instant CD importing, On-the-Go playlists are very good. In fact it has best UI solution for managing large number of files I've seen so far (I owned and operated other players).
USB charging is handy
Decent battery life (so far)
On the downside,
Nano's surface is very delicate and wears quickly after prolonged usage without any protective cover (the screen is somewhat blurry now because of scratches)
Expensive (though I've got it for birthday )
Doesn't have voice recorder and radio
Integrated battery (can't change batteries while travelling and such)