Will the next iPod nano be a little square?

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.
[iLounge]
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Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.