It seems that Gizmodo have cottened on to a forthcoming iPod Nano design which I believe will include video playback.
(Apple Legal has asked Giz to take down the iPhone nano spy shots from earlier today because they are their "intellectual property." Out of respect for The Steve, we've complied. This pretty much confirms they belong to Apple, whether they are final or a prototype.)
http://gizmodo.com/gadgets/awnoes/ipod-nano-spy-shots-confirmed-as-real-by-apple-legal-292524.php