Leaked 7th Generation iPod Nano case has a camera hole.

         This case from the next generation of iPod Nano clearly shows a small camera hole in the top right corner. This, of course, is the most plausible explanation but knowing Apple, they could do anything. But the clip on the back of the current iPod Nano must be moved in order to add the camera, a somewhat major design change, but the folks at Apple should be able to handle it.