i too have d2 and my gf has the nano - as far as physical durability, the nano is hands down much more durable. the d2 is nice and has pretty good battery life, though no where near the advertised 50 hours. i have not ever had more than 35 hours, usually in fact, around 30.
it sounds good, has a somewhat good eq but ... sucks for movies as it never syncs words with lips, the software is rubbish and you need 4 different ones and none of them do what they need.
i like the machine, but it has scratches and i have kept it in its case all the time. meanwhile, my gf's nano is resilient except for the scratch that she made when she drug it across an experiment desk (she is a biology phd). they both exhibit similar amount of noise but the nano at least supports mp4 audio in aac as well as mp3. i store in flac, but i plan about one weeks of music in my player, so flac is not an option for it.
the m5 sound great out of both sources. if i use custom eq with the nano, that is great and the eq for the d2 is okay too. just... i don't know where ipod gets this bad image from... just don't. if the d2 which has been hailed as one of the best flash players has this much trouble with firmware and not supporting video sync and battery life 2/3 of what is claimed... i am deeply worried by those who swear by non-ipod.
anyway... the m5 does them well ^_^