Apple are recalling the first generation Nano device due to a faulty battery that overheats. Apple posted a note on their website which said that the problem seemed to be rare among the first generation owners, but that devices sold between September 2005 and December 2006 may be affected.
Apple say “This issue has been traced to a single battery supplier that produced batteries with a manufacturing defect. While the possibility of an incident is rare, the likelihood increases as the battery ages.
Apple recommends that you stop using your iPod nano (1st gen) and follow the process noted below to order a replacement unit, free of charge.”
Kitguru says: If you are sending your unit in for replacement, then back up the data on the device first using iTunes. Also if you have personalised your device, you will not receive the same in return, just a generic unit.