Yes. You can configure audiobooks that are stored in your iTunes library under Books to sync to your iPod Nano. You can do this from under the Nano's Books configuration tab in iTunes.
To access this configuration tab, plug in your iPod and select it from under theDevicessection in the left hand pane of iTunes to bring yourself to the iPod's Summary tab over to the right. Now locate the Books tab and select it. Here you can configure what and how audiobooks are synced to the device.
If you make any changes to this tab, make sure to hit the Apply button on in the lower right hand corner.
Many thanks for replying to my question. I have tried doing what you suggested this morning but on the summary tab there is no option for books. I have everything else but books. I have gone into music, ipods - all of the tabs and there is no option for books. Any other ideas? Do you think it is because the 5th generation does not allow you to play audiobooks? I cannot play movies on it that I have made in itunes either? I look forward to hearing from you.