My confusion may have stemmed from the fact that the Nano has actually gained some length - it now has a home button, and an elongated 2.5" screen.
Plus all those comparisons to the Nokia Lumia give a false sense of size. But the iPod Nano is thinner than ever, and though the longer screen might make it about twice as long as last year's Nano, that thing was incredibly tiny too.
Unlike the iPod Touch, the iPod Nano goes through radical transformations just about each and every year. Some years it has video playback, some years it doesn't. Some years it has a camera, some years it doesn't.
This year's version has video playback but once again ditches the camera. Alas, having the camera was great in a pinch, but never really offered much in the way of quality photography. The good news for those looking to invest is that the seventh generation iPod Nano is that it is clearly the most functional iPod Nano yet.
This year's design is essentially a very scaled down iPod Touch. The 7th gen Nano is just as colorful, has a similar home button, volume rocker, lock button, and 16:9 aspect ratio.
All of these contribute to the Nano's functionality and let it do more than its gimmicky square predecessor, but not all the design elements are favorable (and our dreams of a high-tech watch have been crushed - for now). The screen is not flush on the body, which feels weird on your thumb, there's a strange white rectangle on the back, and the volume rocker feels and clicks a bit cheap.
Thanks to an integrated accelerometer and included Nike Fitness function, the iPod Nano is a great option for runners. Nike Fitness allows you to run or walk without any accessories, like the Nike+ shoe pod.
Bluetooth 4.0 also means you can hook it up to various accessories, like wireless headphones, your car deck, or speakers. You can even hook it up to a heart rate monitor. As a running device, it suffers from ditching its predecessors' clip, but at just 31 grams it's not the end of the world to throw in your pocket, even during a run.
While having video playback is great when you have absolutely no other options, viewing is still crippled on a 2.5" screen and the Nano's inability to play many video formats. The absence of an App Store accentuates the problem as well, making it virtually impossible to play some (fairly popular) video formats.
Ultimately our biggest beef with the new iPod Nano is that it's technically primed for an App Store, or at least more "functions" but it has no way to download any more. We would love to watch Netflix, or YouTube, or flick tiny birds across the tiny screen, but it remains a dream.
Of course, many of our dream features would require WiFi, and adding WiFi to the device would almost certainly push it out of Nano-size territory. However, if we were forced to plug into iTunes to download offline-only games, we would gladly do so to add some features to the device.
Of course, all the added functionality is no replacement for its true purpose - which is to play music. It does this honorably, producing crystal clear sound through a familiar media player. The included EarPods aren't fantastic, but they're much better than Apple's previous Earbuds.
The iPod Nano only comes in a 16GB model this year ($149), so if you're hoping for more storage, you'll want to check out the new iPod Touch or old iPod Classic.