I've got one of those nanos and have been researching a bit.
It seems to be pretty similar to the 3G in terms of obstacles for
a port, that is the firmware appears to be encrypted and the
firmware partition is hidden while in msc mode.
Firmware updates seem to be done using a DFU mode, similar to the
iphone/ipt, figuring out how to enter this mode is probably necessary
to be able to upload our own firmware.
It appears to use the same or a similar SoC as the ipod touch 2G
so it might be interesting to talk to some of the hackers playing with
those have found out. AFAIU the ipt2g uses AES128 with some kind
of hardware acceleration for encryption so assuming they use the same
SoC it is a fair assumption that the nano uses this same encryption.
However (also AFAIU) the keys differ with each update so i'd guess
they are not the same for the ipod this means that it's likely that some
kind of security hole must be exploited to get code running on the
player in order to get the key or dump the firmware to figure out how
it is loaded and trying to work out how we can replace it.
If anyone have any bright ideas or have made interesting discoveries please add them!