Restarting the 7th generation nano will be very familiar if you've used an iPhone, iPod touch, or iPad. Just press and hold the Hold button (in the top right corner) until a progress wheel appears on the screen. The screen will go dark, but keep holding. In another few seconds, the Apple logo will appear. You can let go now; the nano is restarting.
If you need to restart your nano, or reboot it because it's frozen, hold down both the Sleep/Wake button (the one on the top right) and the Volume Down button (the one of the far left). You'll need to do this for 8-10 seconds.
The screen will go dark as the nano restarts. When you see the Apple logo, you can let go; the nano is starting up again.
Thanks to a software update, the 6th gen. nano can now also be completely turned off.