Hi Ben,
Steve Jobs hinted that the new iPod nano with it's tiny squarish touch screen would make a great watch. The problem with most aftermarket watch bands though are that they don't really look like a real watch. Could you mod the nano by placing it into a real watch shell so you can properly put a watch band on? While you're at it here's a few other mods you can:
• Since the screen blacks out to save time, it would be great to just shake your wrist to have it come up. You'd need an accelerometer or something...
• Hack in a mini Bluetooth module so you can listen to your songs via Bluetooth headsets.
Thanks!
Sherwin Zadeh