iPod nano touch

Back in July we saw an Apple labeled 1.5" touchscreen and wondered if it would be for a tiny, multitouch nano. Now some new cases, purportedly for the same device, makes us wonder much the same again.

Would it run iOS? Could it, with a screen that small? You could fit, what, 2x2 icons for a grid of 4 apps total? Web browsing probably wouldn't be included, but could it have ports of all the usual nano music, photos, video, and other assorted functionality?

Apple has scaled up iOS on the iPad, and is rumored to be doing that again with Apple TV/iTV but would it work as well scaled down for the iPod nano?

We'll find out in a few days.