I don't have an iPod nano 5G that does video so I can't test this out but a company called H2O Audio has an underwater case for the iPod Nano 5G which lets you shoot video underwater.
The iPod Nano 5G lets you shoot 640x480 30fps in H.264 but at $79.99 if you already have a 5G nano this could be a cheap way to get some underwater shots for youtube videos and what not.
A company called DryCase makes one for the iPhone (which I can't test either since I still don't have an iPhone) or any electronic device which costs only $40 or so and is vacuum-sealed with a headphone jack on the outside.
As a kid I'd wrap my 8mm Video camera in Saran Wrap and jump into the pool with it which was cheaper but considerably more adventurous.
Or you can just do this: