Currently Being ModeratedAug 5, 2012 10:08 AM (in response to shartwell)
I think I found a possible answer/solution: apparently the Nano can't handle 256kbps data rate. You need to covert the files from 256kbps to 128bps and the problem should go away. I've had this problem with audiobooks ever since I started getting them from Audible at the higher quality bps. At seemingly random times, the audiobook would pause for a few seconds, then continue. It had the feel of the Nano pausing or cutting off to catch up, so I can believe that this was the problem.
You can convert individual songs or audiobooks by going to Advanced>Create [Format] Version. That will save both versions of the song or audiobook.
You can also do this globally in iTunes by going to Edit>Preferences>General>Import Settings