Return to the question
Question
does it shoot video
Answer
It plays video but you have to have it in the format specified in the tech specs:

H.264 video: 720 by 576 pixels, 30 frames per second; Baseline, Main, and High-Profile level 3.0 with AAC-LC audio up to 256 Kbps; 48kHz; stereo audio in .m4v, .mp4, and .mov file formats
MPEG-4 video: up to 2.5 Mbps, 720 by 576 pixels, 30 frames per second; Simple Profile with AAC-LC audio up to 256 Kbps; 48kHz; stereo audio in .m4v, .mp4, and .mov file formats

Source: http://www.apple.com/ipod-nano/specs.html

I use AVS Video Converter 8.2 to convert any video into .mov format and use the following settings -

Video:
Video Codec: H.264/AVC (Advanced Video Coding)
Advanced...-> MBs and Frames -> 8x8 transform and 8x8 P-frame search selected (don't need to do this part...just for higher quality)
Advanced...->More...->Method: Uneven Multi-Hexagonal (again not necessary...just for higher quality)
Frame Size: 720 x 576 (this is important)

Audio:
Audio Codec: MPEG-2/4 Audio
Sample Rate: 48000 Hz (important)
Bitrate: 256 kbps (important)
Comments