Well, i used to have the iAudio 9. I loved it, but lost it on the plane on my holiday.
I decided to buy the Nano there, because iAudio wasn't sold there. With a bit of scepticism though, because i used to have an iPod (2nd gen) and sold it back then after a few weeks because i hated how it worked with iTunes and wasn't impressed with the sound.
But i figured, maybe they've improved by now. But again, the Nano, didn't impress me at all compared to the iAudio.
To describe it best on how it sounded to me is just "plain flat".
I felt there was no depth or musicality. The lows were thin and didn't have that deep impact the iAudio had. And i'm no basshead by any means, it just felt i lost a part of the bass range. So it lost a bit off depth on that end. The mids are great though, but the highs was very hissing and sharp.
When i started playing with the Nano's EQ it only got worse. It felt i was only tuning the treble. So when i added bass it just sounded unnatural, foggy. When i lowered the high freqs it just numbed the sound and lost it's openness. So that just didn't work for me, with the Shure's at least.
What i liked about the iAudio, although i loved the sounds signature straight away, were the possibilities to tune the sound with their BBE+ and other enhancement features. It just made the music more loose and rich. Gave it more depth.
So i guess the conclusion is i think the Nano is just too clynical/flat for me. I love a more rich sound, without loosing details.
But i hear many people say the iPods really shine with an amp added to the mix. To give it more power and control. It might cause the highs to be more controlled and less sharp, and give the bass just that little extra dynamic, control and power.
Hope that makes things more clear :)