He says their are two separate issues: the broken screen and the complaints about screen scratches. He claims they have tracked down the issue with the broken screens:
“This is a real but minor issue involving a vendor quality problem in a small number of units,” Schiller told MacCentral. “In fact, this issue has affected less than 1/10 of 1 percent of the total iPod nano units that we’ve shipped. It is not a design issue.”Customers with a broken screen only need to contact AppleCare and their iPod will be replaced for free.
Regarding the scratch issues he said the iPod nano screen is made with the same material that is found in the company's fourth-generation iPod, which, to date, is complaint free:
“We have received very few calls from customers reporting this problem – we do not think this is a widespread issue,” said Schiller. “If customers are concerned about scratching we suggest they use one of the many iPod nano cases to protect their iPod.”