Hi,
You have to use iTunes to transfer your songs on to your iPod Nano.
An iPod can support the following file formats:
MP3, M4P (AAC), AIFF, WAV etc . . .
Have a look at this link:
http://docs.info.apple.com/article.html?artnum =61476
I use both MP3 and AAC files on my iPod. I've only used music purchased from Apple's iTunes Music Store, so I don't know if the iPod works with music purchased from elsewhere. I also import my CD's in to iTunes as both MP3 and AAC and then transfer them to my iPod.
I hope this info is helpful to you Greedyfly.