Apple has found that in rare cases, the batteries in some 1st gen iPod nanos can pose a fire hazard. I found my old nano while I was cleaning the other day, so I went ahead and registered for a replacement. A few days ago, Mac Rumors started getting reports in their forums that, after some extended return times, Apple had started shipping current model nanos as replacements. They confirmed the next day that participants in the program were indeed receiving 6th gen nanos which include increased capacity, a touch screen interface, Nike+, a watch app, and a clip.
If you’ve been eyeing those iPod watch bands, it might be worth your while to fish out your old nano and send it in. [register here]
(This has also been reported on TUAW, AppleInsider, Macworld, and The Verge.)