Well, the nano's screen is about 1.5" diagonal. I can't see how you can watch too many videos on that, but perhaps that's just me.
If you absolutely have to or really like to carry all your music with you at all times, then sure, get a classic.
But if you can survive with just your few thousand top songs, then go for the nano. The smaller size is really useful.
I know of no major issues with either of them. Though the same goes for older iPods too -- not sure why you had so many issues! Amazing bad luck, I'd think.