In the third generation of iPod nano, Apple has included the famous Cover Flow feature. But what if your iPod belongs to the generation before this? Well, AFAIK Cover Flow is not available. Either Apple would like the owners to upgrade or the hardware is simply not powerful enough. Pick your battle.
The solution: use Rockbox. It is a firmware replacement not only for Apple iPods but for a wide range of other popular music players. Since some time ago, it sports the PictureFlow plugin (still in continous development) which has the same idea as Cover Flow. This plugin is based on my PictureFlow Qt widget, something that I have mentioned before. The obligatory screenshot (courtesy of Jonas):
The good thing is, it is not limited to those iPods. At least, in the wiki page, it is reported that this PictureFlow plugin works for (among others) Sandisk Sansa e200/c200, Toshiba Gigabeat, Cowon iAudio X5, and iriver H300. For proofs, you can check some YouTube clips related to PictureFlow, for example: