The calibrate function is actually just another work out to a pre-determined distance but it's not found in the Workouts menu. First measure a pre-determined distance with your car, bike, tape measure, whatever. It can be as short as a quarter mile ( I used one mile). You're going to run (or walk) that distance while in calibrate mode. Go to Settings in the NikePlus menu on your Nano. Then go to Sensor, then to Calibrate. Choose Run or Walk. With the click wheel set your predetermined distance. Then choose a Playlist, etc. The voice will then tell you to press the center button to start the workout and then press Menu when you're done. She's a LIAR!! Simply pressing Menu at the end of the calibration run won't stop the workout or calibrate the unit. It will bring up a small pull down menu on the Nano that then gives you the option to stop (and calibrate) or continue. You MUST scroll to the appropriate answer and then hit the center button. The Nano will then give you the calibration completed data. Obviously, if you're wearing your Nano on an arm band like most users all this extra time clicking away is screwing up the whole purpose of the calibration. After several tries I finally got mine accurate by running with the Nano in my hand the last 20 seconds or so and being ready to hit Menu, then select end, then hit the center button. Hope that helps.
I'm still tryiing figure out how to delete old workouts from the Nano. My wife can no longer load new workouts to the NikePlus website because her Nano won't hold anymore. It's a real SNAFU for two companies as innovative as Apple and Nike.