It may just be a matter of patience.
Technically, iTunes and the iPod nano will still talk to each other. However, I have noticed that after an iTunes update, it can take a while before any iPod is recognised by iTunes.
- Make sure you re-start your computer and iTunes
- Also, before connecting the iPod to your computer, turn the iPod off completely and then re-start it. I don't have access to my nano at the moment, but it should just be a matter of holding the power button down so that the iPod powers off. Once it has, hold the power button down again until it begins its power on procedure
- Connect the iPod up to iTunes
- Wait for at least two minutes to see if the iPod is recognised
If necessary, go through this procedure a second time. If it doesn't work after that, we will have to review the situation.