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If you have a small library of music, not alot of photos and have no inclinaction of watching video's then: NANO. If you have a large music library, tons of photo's and want to have video's then: iPod.
I use the iPod for listening to my albums. I use the nano for keeping a rotation of my current favorite singles.
The nano with a ToughSkin is also perfect for workouts since there is no hard drive and can handle the juggling when jogging. But a Shuffle is definitely the best bet for workouts since it is near-indestrucible.