Well, it appears the rumors of a iPod nano recall were someone overblown. Here is the real scoop. There was a bad batch of nanos from the manufacturer that resulted in the screen cracking problems reported in the media.
Apple has responded by allowing those customers to return their nano for a replacement. According to Apple this only impacts 1% of nanos sold. Sure, a bit inconvenient, but not the end of the world.
As for me personally, I think I'm going to jump on the video bandwaggon and get one of those new video iPods just announce. I stopped by my local Apple store, but they weren't yet in stock.