In Apple Takes Digital Music to New Heights, I discussed Apple's digital music strategy and explained how the company is humbling Microsoft, which sought to dominate that market by using the same strategy it employed in the PC market. Apple's dominance is tied to two products—iPod and iTunes—and a general sense of style and elegance that's simply lacking from all competitors. Until last week, Apple's control of the digital music market seemed beyond reproach. But then the company announced its unbelievable iPod nano device, which replaces the iPod mini. And although this might not seem possible, Apple's control of the digital music market is now even more secure than before. And there's nothing—absolutely nothing—that Microsoft can do about it. The iPod nano, dare I say it, is almost perfect.

The first thing that strikes you about the iPod nano—and you really need to see it in person to appreciate this—is how small it is. It's barely wider, and actually quite a bit thinner, than the iPod shuffle, but it features a gorgeous full-color screen and a standard iPod scroll wheel. It fits in the palm of your hand like a tiny, beautiful jewel, and it gathers stares and comments from onlookers like no other digital device.

There are two versions of the iPod nano: a 2GB version ($200) that holds about 400 songs and a 4GB version ($250) that holds approximately 1000 songs. You can get both versions in standard iPod white or a new black color; my 2GB test unit is black. Both devices feature the wonderfully simple color menu system that the high-end iPod uses. However, the iPod nano also includes some extras you won't find anywhere else, including a multiple-time-zone clock, a stopwatch (perfect for you music-loving athletes), and a few new games. Apple has also added the ability to synchronize Microsoft Outlook contacts and calendars, making the iPod nano a handy PIM replacement, as well.

Apple ships the iPod nano with a set of earbud headphones, a curious dock adapter that doesn't appear to do anything quite yet, and a short instruction manual. A bundled CD includes the iPod Updater software you'll need to interact with the device from Windows or a Macintosh, and iTunes 5.0, the latest version of the best jukebox application on Earth. Because the device uses a standard iPod Dock connector, you can plug it into any standard iPod charging cable, dock, or accessory, and it should just work. That dock adapter I mentioned is apparently designed to let the iPod nano work with certain third-party accessories, but I haven't had a need for it yet.

Battery life is exceptional. Apple rates the iPod nano at 14 hours playback time, and I was able to listen to it for days at a time, including the complete length of a non-stop flight from Los Angeles to Boston. Sound quality is superb, thanks to enhanced audio circuitry that first debuted in the iPod shuffle.

As I said, the iPod nano is almost perfect. Apple cheaps out by not including a carrying case or lanyard for the device; either would prevent you from simply tossing the device in your pocket and subjecting it to abuse from coins, keys, or other paraphernalia. My test unit is already scuffed up pretty severely, despite my attempts to baby it. And I've got real concerns that the skinny iPod nano could be easily killed by inadvertently sitting on it. The device is that thin.

Additionally, most of the iPod nano accessories that Apple has promised are still weeks away from shipping, which is also a shame. You can't get a lanyard, protective case, or carrying case for the device now, even if you were willing to pay extra for something that should have come in the box. Finally, I hate the name. Apple should have kept the iPod mini name, which is far more descriptive—and accurate. Apple's iPod shuffle is smaller than the iPod nano.

These are all quibbles, of course. The iPod nano is that rarest of tech devices: Immensely useful, beautiful, and desirable—all at the same time. We're getting to the point at which most new iPod purchases are probably coming from repeat customers. So, whether you already have an iPod or not, the iPod nano is a great device to consider. It just doesn't get any better than this.