too long sucking blu-ray torrents from a 100mbit pipe?
640x480 is low quality these days? The Beeb's own iPlayer defaults at 640x360 (or lower) and will only go up to 832x468 if your connection passes the high-speed streaming test. Their 720p HD output just about runs reliably on my base-level Virgin Media connection.... when they're not doing their evening bandwidth restriction that is, when it descends into an endless cycle of buffering. I'd say full-motion VGA is just fine for online sharing at the moment - it's better quality than both iPlayer and definitely YouTube's defaults, and if you get a good framerate it's only a gnat's away from broadcast quality.... or even perceptually better if you don't overcompress it. (It's also the _highest_ that my otherwise good digicam will spit out ;)
That said, I'm still not a fan of the nano, because it seems like they're out to spite those who complained about the iPhone not being able to do video: It can't take still images!