Truth be told, I loved the design of the second generation Nano. The candy-bar form factor, the proportions, the brushed metal. The whole thing. Sure, it couldn't do video, but it was just the right size to take running with the Nike+ kit, whilst retaining a screen - and I always perceived it to stand up to more wear and tear without a shiny metal back cover. It fitted just perfectly in the hand so you can imagine that with the new model, it'll take you a while to become used to the feel of the device. Instead of holding the iPod like a candy-bar, it sits in the palm of the hand almost unnaturally at first with the (proportionally large) screen being the most attention-grabbing part of the device. The new Nano also shows a return of the stainless-steel reflective metal backing (can you smell the 'scratching' lawsuits already?) and despite my most devoted efforts to keep the iPod totally scratch-free it just doesn't look as stunningly new as it did.
So what are the initial flaws with the device? To be picky about Cover Flow (a feature I've never really enjoyed or seen purpose for in iTunes) it looks somewhat less than slick - cover art looks rather distorted when not at the front of the Cover Flow queue, and the white background to the Cover Flow is possibly unfamiliar, but still looks out of place. With so many of the screens using black touches (such as the title of tracks now playing, the sync-screens and more) it seems a little bold.
Another issue is a double-edged sword. The ability to choose folders of playlists to synchronise, instead of having to individually select playlists, is long overdue in iTunes, however the distinction between folders of playlists and individual playlists on the iPod itself is merely left to be deduced from the song count. An icon to the left of folders to designate them as such, or a statement of '5 playlists' instead of '143 songs' would be far more intuitive. I also experienced a few issues with Folders of playlists not synchronising over, leaving an empty folder in its place, however after having turned off music synching and then re-enabling it has now resolved itself. Thankfully, these small flaws can likely be resolved in a future software update (it is, after all a 1.0 product).
Whilst the iPod Shuffle (of which I am a huge fan) made music truly portable, affordable (and, if you believe Mr Jobs, wearable), the new Nano does something equally ground-breaking: it makes video truly portable, and truly affordable for the 4Gb Silver model's $149US price is an incredible low price for the iPod / Video / iTunes package. If there were ever an Apple-designed salvo to media companies that they 'ought to ge their video on iTunes', and another hit for Apple this Christmas, the new Nano is just that.