Dear iPod nano owner,
Apple has determined that, in very rare cases, the battery in the iPod nano (1st generation) may overheat and pose a safety risk. Affected iPod nanos were sold between September 2005 and December 2006.
This issue has been traced to a single battery supplier that produced batteries with a manufacturing defect. While the possibility of an incident is rare, the likelihood increases as the battery ages.
Apple recommends that you stop using your iPod nano (1st gen) and follow the process noted below to order a replacement unit, free of charge.
So basically, you enter your serial number which is on the back to see if your ipod is one of the affected and they will ask you to send in your nano and they will replace it.
Idk what they will be replacing it with though, probably a referbished nano, or if we're lucky a current generation nano? but i doubt it haha
Heres the link to the apple website; http://www.apple.com/support/ipodnano_replacement/
and heres a link to the mac forums; http://forums.macrumors.com/showthread.php?t=1274489