But Tidey - given you paid 41 pounds, for a 4 GB Nano, the 8 GB at 79 pounds would be comparable, pounds per GB. True, the 35 pounds for the 2 GB model is more costly, but if they get some 4 GB models at 45 pounds they would seem reasonable, as they'd have a year's warranty in case of needing a repair, compared with s/h from a newspaper or Ebay.
While I was wandering around the UK Apple Store I did see the mention of extending the warranty, and found (after online chat with someone to get the weblink) that it only adds an extra year (ie for 2 years from date of purchase, not an extra 2 years).
AppleCare for the iPod and Nano costs 24 Euro (20.87 at current exchange rate, and figure shown in my basket) +VAT. So the 8 GB would cost 79, and the AppleCare a further 24 pounds (today).
Given it only adds a year to the standard warranty, it's perhaps only worthwhile on the 8 GB and higher cost models where a replacement would be costly.
Good luck reban, hope you find a suitable model at a price you like. My 1 GB (non-Apple) player was about 10 pounds, but not trendy enough and 'in for a dig' for a teenager!