I bought the iPod nano 7th edition last week. Personally, I was attracted by his design, the FM radio and the touch.
Where it was in my hand, the first impression was good. The usability was wonderful, albums, tracks can be easily selected ... and in a while. Also FM radio have a good frequency scan. Touch screen was not as sensitive as the iPhone one's, but it is ok.
Lightning connector is, for some aspects, better than old 30 pin connector. For example, drag and drop of an entire album on AAC 256 kb from iTunes takes less than 5 seconds.
But, another story is sound quality.
I spent 2 hours comparing iPod nano 7th edition with the iPhone 3Gs, by using the following headphones: akg 450 (portable) and akg 240 and listening the following albums: 21 (Adele), Discovery (Daft Punk), The division bell (Pink Floyd), converted by lame to 320 kbps MP3 from flac.
The first impression was that iPhone 3GS sound more than one step better.
The sound was much more clear and detailed in 3G than in Nano. Also instruments were more defined. In both high frequencies was quite good but the Nano sound less clear and was a little bit crispy. But Nano's mid-high range really disappointed me. This range of frequency sound so confused, like compressed and it was difficult to clearly understand instruments playing in this range. Bass range was pronounced in 3G and quite lower in Nano's, especially with AKG 450.
Another important feeling was that 3G sound more warm, while Nano's sound like something artificial.
The best played album for Nano was Discovery, and following listening with other Albums confirm me that impression: Nano is rather better in electronic music.
These impressions were similar for both headphones.
Also I tried to connect Fiio E11 to headphone out and the feeling was quite similar.
At this scene we must add that 3G has a quite good line out, while nano haven't one. You must buy an adapter that it is supposed to play worse than the headphone out.
So, If you like sound quality, I pod nano 7th generation is not the player you'd like to buy.
Hope to be helpful.