With its high-contrast, high-quality display, the iPod nano's LCD screen is very readable, considering its small size. But Apple lets you also change the font size settings of your nano; by default, the nano ships with the small font size ("Standard" option). This tutorial explains how to make the font larger (increase text size to "Large"), and how to revert to using the smaller font afterwards. The iPod nano includes only two font sizes, and the large one is only about 20% larger: but given that all text is styled with bold, and how flexibly you can hold the nano closer or further from your eyes, we think that most eyesight levels won't face too many usability challenges.
Here's how to switch to the large font size on your nano: (larger text size)
Resume using your iPod nano to get accustomed to the new text size; hopefully you will find the text big enough to read.
Tip: if you are still having problems reading your iPod nano larger text size, consider changing your brightness settings to a brighter level; the nano's screen, at its maximum brightness level, will tremendously help by increasing text contrast. Although the nano display's viewing angles are excellent (in part because of the convex shape of the glass), text contrast and font visible will be best if you hold your iPod nano parallel to your face. Outside in full sunlight, placing a hand between the sun and the screen will help with brightness and readability.
You can easily switch back to the regular text size ("Font Size - Standard") by following the same steps outlined above. From the home screen ("main menu"), go to Settings > General > Font Size, and click on the font size to toggle back from Large to Standard.