[Linux4Nano] over at the [Gna! repositories] have just finalized a breakthrough for their bootloaderproject. Because the iPod Nano 2G has a hardware encryption chip, it could previously not be flashed with a custom firmware. By digging around in some assembly code (and working their magic) the team was able to get Linux onto the 2G, develop drivers for its peripherals (screen, clickwheel and serial interface are a few), and put all of that code into a package convenient to install by the end user. If you’ve ever considered installing uClinux (the ported distro) on your Nano, the [Linux4Nano] team have made the iLoader an easy place to start.
Update: Closer inspection yields that the iLoader is not yet able to load uClinux onto a 2G because it has not been ported. However, it can reload it with other custom firmware which is still a solid breakthrough.