Having 16GB of storage is a huge plus for the new version of the Nano.
The control wheel seems a bit "stiff" and it is not as responsive as past versions but it works fine.
The menus and setup choices have been improved. These are nice but don't make a major difference. "Shake" shuffle is a bit silly (in my opinion it is just as easy to push the advance on the control wheel) but it can easily be turned off.
BIG MINUS - Apple un-necessarily changed the plug on this version of the Nano. The unit will not charge using my older iPod chargers. The bigger issue is that my Bose and other expensive speaker units will play this Nano but they won't charge it.
Apple is beginning to act more and more like Microsoft - forcing its customers to make un-necessary software upgrades and expensive hardware changes in order to use their latest product versions.
Anyway - the Nano is a great product. If you already have a Nano the only justification I can find to upgrade would be the need for more storage or the desire to play video on a very small screen.
If you don't need the video or more music storage you should stick with your older Nano.