Todd Dailey has a nice little how-to up on his blog, showing you how to restore the shine to your iPod nano with a $4 can of Brasso. He has step-by-step pictures and then end results looks so amazingly good that he adds this note: "Holy. Crap. I feel the need to assure you that these are actual unretouched photos of the final clean nano. The same one that I showed in the 'dirty' pictures above. As you can see, the Brasso got rid of every single scratch. My nano looks completely, totally brand new. Again, believe it or not these are actual 'after' pictures! Im very, very impressed. If you dont get these results, get back to work on the nano with the Brasso. Im confident that with enough time you can remove any shallow scratch."
Of course, if you don't want to spend the $4 on the Brasso, you could always just flip the hold switch on the nano and rub your nano obsessively with your thumb as you listen. The natural oils of your hand combined with the friction from your skin will eventually rub out some of the minor scratches. That's the method I've been employing anyway.