If you've spent a tiny fortune on your iPod Nano, you want to get a case that will really protect it from getting damaged or broken while working out. When I run, mine used to always fall out of my pocket, but I'm totally covered with the iSkin Duo.
The iSkin Duo has 2 layers (hence the name) which equals twice as much protection. The inner layer is made of colored silicone, specially treated to resist dust and lint. I love that it has integrated click wheel protection. It is shock absorbing (for when you accidentally drop it a million times), and protects against moisture (like sweat or rain) and normal wear and tear.
The outer layer is called the VISOR Face Protector. It's made of hard resin and protects the face and screen of your iPod Nano. There is a removable rotary beltclip included, so you can clip it to your pocket or waistband when you exercise.
It protects against both impact and scratching, but is still compatible with Apple's Universal Dock and other similar docking devices. Have I peaked your interest? You can get one for $29.99 directly from the iSkin website.