Now and again I will watch video on my iPod, but the iPod nano screen is rather on the small side for me, so prefer using other things for video (such as my Mac or my Archos device).
However I have been experimenting with an AV cable for the iPod nano and it works well on my TV. Battery life is ample for a whole movie.
Only downside is pausing or rewinding the movie is a little more complicated than using the remote.
You can also connect the iPod nano to a projector, if the projector has a video input.
Though you can only show videos and images in this way.