On the heels of reports from Japans investigations of iPod nanos getting hot enough to burn, Apple has acknowledged "in very rare cases" first generation iPod nanos can overheat. The problem can cause "failure and deformation of the iPod nano."
Apple is suggesting anyone who has a first generation iPod nano and is experiencing overheating issues to contact Apple Care. iPod nanos with faulty batteries will be replaced free of charge, though it is unclear if just the batteries will be replaced or the complete iPod.
Some users on SlickDeals.net are reporting Apple Care is sending them to Apple Stores or having them mail in their iPod to be replaced or worked on.