"
With the new projecting screen the iPhone Nano is very compact for easy storage. The iPhone Nano projects on to all kinds of objects for easy navigation. Compact, the iPhone Nano is functional and fun, with many of the same features as its big brother the iPhone. Available in all six of the iPod colours so you can stay stylish. The screen does not always have to be projected in order to use the iPhone Nano. You can answer a call with a simple click of the phone icon. Most other navigation takes place with the projected screen and the familiar click wheel. You could even project onto a wall to show your friends the latest You Tube video you downloaded. Projecting a large image would mean a lower resolution but your friends would get the idea. The Projector could be refined over future editions for larger, more detailed interface. You can watch movies, TV shows, and navigate to all your friends’ and coworkers’ contact information with excellent image quality on the side of a mug or the back of a pad of paper. There would be a setting when projecting onto dark objects that would invert things like text so they would still show up and allow you to navigate."

...still amazed? Gotcha! These weren't the description and image of Apple's iPhone Nano, but only a concept belonging to Bill Murphy, from Canada, that entered iLounge's
iPhone Nano Concept Contest! ;)
Now, leaving purely fictional stories aside, we have those rumors that simply won't fade away, since new voices from the Far East claim that the real iPhone Nano should arrive sometime this spring.
According to a Chinese language paper, namely Economic Daily News, bidding for some of the iPhone Nano's potential component suppliers is almost complete, so once that is left behind, manufacturing should start.
What I can expect is this - a smaller iPhone, without GPS and camera, and with a smaller screen and reduced storage capability, but with full support for the apps able to run on the iPhone and iPhone 3G, except those related to the components excluded that I mentioned. Would you spend $99 for such a thing? I don't know about you, but I would surely grab one!