Wo,if you know the completely free way ,don’t forget to tell me.I’m also a ipod fans.While if you still want to delight in videos on ipod nano,I can tell you how I do.So simple !
iPod can only support mpeg4 or mp4 video,so you must make sure the videos you want to play on your ipod is mp4 format .You need to have a 3rd party tool to help you to convert dvds and video into mp4 or h264 format, add them into itunes library, then sync to ipod.
I recommend you one software which works pretty well on my ipod.

Take the following steps:
Step 1: Install and run Aiseesoft iPod Movie Converter by clicking here:
http://www.macsoftreviews.com/aiseesoft-ipod-movie-converter.html

Step 2: Click the “Add to” button to add your video
Step 3: Select the audio formats from the drop-down list of profile
Step 4: Click the “Start ” button to start the conversion.

If you are interested in video to ipod,you can see
http://www.macsoftreviews.com/reviews-dvd-to-ipod-converter.html

Contact me if you need further help .

Incorrect video format. iPods require a very strict MP4 codec and file format. Just a tiny variation such as allowing the files to be 64-bit will break compatibility.