I'm talking about when you play a video on the 5G, and then hit Menu to go do something else on the iPod, it stops the movie. Meaning, the iPod can't playback video AND control the GUI at the same time, which most likely means it's using all of its power to process the video (and the video's audio).
But on all over iPods you can use the GUI and continue playing the audio, which means it's probably using 1 processor for the GUI and one for the audio.
Edit: ok I don't really know what I'm trying to say... mostly that the nano won't support video because there is no video output, and most people don't want a device that is limited to playing back video on its tiny screen. The 5G screen is small enough, and then take the nano...

!