The interface is easy to use once you get comfortable with the lack of a Home button (you swipe to switch screens) and certain GUI changes (switch buttons are smaller and look slightly different from their standard iOS cousins). The nano refused to play with older versions of iTunes, expecting a minimum of iTunes 10.
Although the unit uses a very iOS-like interface, it appears to be running on an alternative OS, probably a variant of the old Pixo OS. The firmware ships in an ipsw bundle, but internally, there's not a lot of there there. Much that is there has the look and feel of iOS, even if what's running under the hood may not be.
From the pop-up alerts in the timer app (be sure to use an external speaker or dock to hear your timer ping you when your eggs are cooked) to the buttons, icons, and page controls, Apple has deliberately modeled the UI on iOS. Internally though, the nano is far more limited. It has busted out a number of music screens, normally internal to the iPod touch's music app, into separate areas of access.
Songs, genres, albums, composers, playlists, podcasts, artists, Genius mixes, and "Now Playing" each occupy a top-level spot in the nano UI. Settings, Radio, Photos, Fitness, and Clock utilities round out the iPod "applications." The SB in the pseudo-application names that I linked to refer to SpringBoard, the application that runs the home screen under normal iOS.
Settings is an interesting creature. Although there's no video playback support on the nano at this time, it does provide photo slideshows; the internal settings property list, the bit that stores your preferences, hints that more video support may yet be on the horizon. Options for captions and alternative audio hint at possible upcoming movie and TV support.
(Here's a full dump of the base readable file system.)
Be aware that shake-to-shuffle is enabled by default, a feature that I normally disable on my iPod touch. I haven't had time to try the nano out in motion, but since it's not meant to be worn on the arm, maybe it won't suffer from shake-to-shuffle "mystery song change" syndrome. Given the nano's new form factor, shake-to-shuffle will probably be an important part of your interaction vocabulary.
I thought the pedometer feature with its daily step goal was a nice little touch, but my favorite feature of the whole device? How the "Carrier" name for the unit is set to your iPod's name. That's really cute stuff. Sadly, my old external iPod remote attachment (perfect for pocket-based units) no longer works -- I got a pop-up complaint that the accessory was not supported. If you want to record voice memos or use an external squeeze control, you'll need to purchase iPhone-style earbuds separately. (Earbuds of some kind, iPhone or iPod-standard, are a pre-requisite for FM reception by the way.)
My nano did recognize my standard Apple composite video cable but I had a bit of trouble getting the unit to export live slideshows until I finally realized that you must be playing a slideshow (not just browsing one) for video out to kick in. Neat stuff there, however. I found the on-screen intuitive to use -- once I actually located the controls. Double-tap zooms into the picture, and two-finger interaction rotates it. It takes a single light tap to bring up the interaction overlay but from there, it is smooth sailing.
Unfortunately, this nano like previous generation iPods does play the "I don't want to show up in iTunes" game that so many of us know and hate. A full system reboot for both Mac and nano seemed to fix my problems -- at least for the moment. Oh, and if you want to reboot your unit? Hold the sleep/wake button and the Volume-down button for about 5-10 seconds until the white Apple logo appears. The nano reboots in something like 3 seconds. It's amazingly fast.
The iPod 6th generation nano manual is now live. You can download a copy from Apple's support site.