It may not be anything more than a bit of excess or leftover code, but it looks like there's at least a hint of some possible video playback capabilities lying deep in the code for the new iPod nano (the internal settings property list, to be specific). As discovered by Erica Sadun over at TUAW, that includes options for things like TV subtitles, captions and alternate audio, and even a fit-to-screen option -- for the perfectly square aspect ratio of the nano's screen, perhaps? Of course, there doesn't seem to be an option to actually make video watchable on a 1.5-inch screen.

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iPod nano code hints at possible video playback