Enter a small company named Hex, recently they introduced a silicone watch strap that the new Nano sits inside of. The new jacket has an opening for the headphone jack, and integrated buttons for control. I think we can also presume that the case of the iPod will be well protected encased in the strap.
The Hex strap will set you back about $25, and comes in a a choice of 9 colors. They can be seen in greater detail, and purchased, through the Hex website: www.shophex.com
A great way to hide the headphone cable [photos courtesy: www.shophex.com]