My Nano 1G has been working fine since new. I have it loaded ¾ full of only podcasts. Recently, I "restored" it after a glitch and when it was restored, only about 25% of my original content appeared.
I have a few books onboard which I dumped to lighten the load even though it was clear there appears to be a phantom living onboard filling up space that doesn't show as book or podcast content.
I'm managing the synching manually (as I have been for three years) and even though after listening to a few podcasts, I usually hit the synch button and those listened-to podcasts jump off leaving me to manually drag new stuff on from the library.
The visual inspection of the content shows about a quarter to half a gigabyte on shown and books on the device but the Capacity meter shows full and nothing else can be loaded aboard.