Towards the end of last year, Apple announced there was a problem with a batch of the 1st generation iPod Nanos - issue with a small number of batteries overheating, potential fire hazards etc. Some people will have sent theirs back as a precaution, some might not be bothered, some might not know about it at all.
Sent our 1GB Nano back a few weeks ago - the battery was getting tired anyway so thought it'll get a new battery and it'll keep going for a bit longer so if not for safety concerns, a replacement battery for free. Nice.
Got the replacement notification through the other day disclosing the serial number of the replacement unit. Turns out they're not sending out a reconditioned 1st Gen Nano as I expected they would, but the current model 8GB Touch Screen Nano instead. Sweet! Turns out a number of people have reported the same so appears to be the exchange policy in general for this particular program.
If you've got one and not already checked it on the support site, get it done and possibly get a free upgrade at the same time.
Apple - Support - iPod nano Replacement Program