How to reset iPod Nano if it is not responding or frozen.
Hold down the Center and Menu buttons simultaneously. The screen will start to melt away. Then you will see the Apple appear on the screen. The iPod has been reset successfully.
Music files should still be saved, but some customized settings may be lost.
If that doesn’t fix your problem, try a hard reset by holding down Menu and Play/Pause simultaneously for about 10 seconds. A hard reset will clean all data off the unit.
iPod troubleshooting basics and service FAQ