I just got my nano, loaded it with some music, and started testing it against my ipod photo with my e4's, and found some very surprising things.
I started listening and comparing, and I heard something different than what everyone was saying. The photo sounded better. Well, it wasnt necessarily better, but it certainly was different. With the photo, it seemed like there was more treble and more Bass. When I switched to the nano, the lyrics were much more forward. Were the mids exaggerated on the nano, or are they recessed on the photo? That's not supposd to happen. I switched songs, and it was definitely there.
Then I realized something. The photo's eq was on Latin. Whoops. I never use the eq, but was messing around with the e4 straight from the headphone out with various eq's.
So, now that they're both flat, I think the nano sounds a little better, but I'm having difficulty ensuring that the volumes are at the same level. However it is, the difference is subtle.