TrustedReviews posted a review of the Apple iPod nano

The nano ships in two capacities, 2GB and 4GB. I went for the 2GB because 4GB isn’t anywhere near enough for me to store all my music, and besides that’s what my 20GB iPod is for - so my rationale is that you might as well save £40, since you’re going to have to mix about your tracks no matter which capacity you go with. Apple reckons that the 2GB nano will store 500 songs, with the 4GB holding 1,000. Of course how much you actually get onto any device depends on the bit rate at which you record your music and the codec you use. Like all iPods, the nano supports two codecs, AAC and MP3, with the former being the more efficient of the two.

Apple iPod nano Review