My nano suffered an unknown error occurred (1418). Fixing it is by following these instructions:

• Disconnect the iPod from the computer and close iTunes.
• Highlight all of the following 10 lines of text that begin with regsvr32 and then choose Copy from the Edit menu of your web browser:
  
  
  • regsvr32 /s softpub.dll
  • regsvr32 /s wintrust.dll
  • regsvr32 /s dssenh.dll
  • regsvr32 /s rsaenh.dll
  • regsvr32 /s gpkcsp.dll
  • regsvr32 /s sccbase.dll
  • regsvr32 /s slbcsp.dll
  • regsvr32 /s mssip32.dll
  • regsvr32 /s cryptdlg.dll
  • regsvr32 /s initpki.dll
• Open the Notepad program by navigating to: Start > All Programs > Accessories > Notepad
• In Notepad, choose Paste from the Edit menu. Note: make sure that the text that appears in Notepad is the same as what is shown above (except the numbering of the steps).
• From the File menu, choose "Save As". You will probably need to select 'All Files' from the drop down box labeled 'Save As Type:' below "File name:' or it will save as a text file.
• In the File name: field type appleipod.bat and save the file to the Desktop.
• Close Notepad and locate the appleipod.bat file. It should appear on the Desktop with the icon shown below: (image unavailable. the icon will be a white box with a blue border on top, and a gear with a peg in it inside the box.)
• Double-click the file and you will see a black window appear on the screen for about a minute. Wait until the window automatically disappears and proceed to the next step.
• The appleipod.bat file can be deleted at this time.
• Open iTunes and connect the iPod.
• When the iPod appears in iTunes, restore the iPod and resync your content.

I got my nano back in tune!