When you're watching video on the iPod Nano 4G, does the Menu button become the rewind button?

Nope. The menu button is ALWAYS the menu button.

Of course not, that would be confusing! Apple is not confusing

No, they stay as labeled.

It would be cool, though, to have little OLED screens where the text on the menu / play/pause buttons are, so that they always appear upright.

yeah, if they turned to the exact angle you were holding it :D
Well, that might nock up the price a lot for a small thing… Ah well, we can always hope :p

It might, but I doubt it. The accelerometer is already there, and from our experience with the granularity from iPhone/ iPod touch, the sensor can tell. Programming for that wouldn’t be hard either.

That said, it certainly adds production value to the device, which they would want to capitalize on. Then again, the price points for the iPod lines are rather set-in-stone.

Yeah I was just thinking about how weird it would feel to skip through videos by effectively pressing the button pointing ‘up’ when in video mode to track through video… It would feel weird!