According to The Wall Street Journal,
Apple Korea has issued a recall of 1st generation iPod nanos in South Korea. Some units have had a problem with overheating batteries, causing damage to the units and on some occasions the users themselves.
On June 25th, the Korean Agency for Technology and Standards prompted Apple Korea to
issue the recall. Apple later released a statement reassuring owners of current-model nanos:
"Although the overheating problem doesn't affect the batteries that are being used now in iPod nanos, concerned customers can get a replacement battery."
If you're a nano owner in South Korea, you may be eligible for this recall. Check with your local retailer and good luck.
UPDATE: As Loopinsight points out, this has always been Apple's policy. Nothing has changed and this isn't really a recall at all. We regret the error.