Editor's Note: Apple has released iPod nano software 1.0.2 on 9/27/06, which fixes the bug (noted in my review) that caused problems when scrubbing through long VBR-encoded MP3 files. In addition, the review has been updated with our battery rundown test results.

Amid all the hooplah at Apple's September 12 press event, the company released the second generation of its wildly popular iPod nano. Thanks to its new anodized aluminum casing, the new model looks much like the now-defunct iPod mini, but much, much slimmer. Improvements over the first-gen nano include a brighter screen, longer battery life, and my personal favorite—gapless playback. The 2GB model comes in silver only while the 4GB model comes in silver, green, blue, or pink. And the 8GB model comes in black only (the 1GB model has been dropped). This revamped nano still lacks an FM tuner, a voice recorder, and video playback, so other premium flash players such as the popular SanDisk Sansa e200 series still have the iPod trumped on features. But then, the Sansa e200 doesn't do gapless, support lossless compression, or support Audible audiobooks. And the nano syncs with your Microsoft Outlook (2003 or later) contacts. One major difference between this generation of the nano and its predecessor is that the new model has picked up the optional recording capability of its full-size sibling; using an optional microphone adapter from Belkin (and soon others), you can create voice or line-in recordings on the iPod nano. Now that the player comes in an 8GB capacity, this is a significant new feature. It's a good bet that this will be Apple's most popular iPod yet, and with good reason.