1. Connect your iPod Nano to your computer. If prompted to sync with the iTunes library, select "Cancel." If syncs automatically, close iTunes.
2. Click the "Start" button on your desktop and click "My Computer."
3. Double-click "My iPod," and if there is a folder named "iPod Control" double-click it and select "MUSIC."
(If there is not, click the "Tools" menu at the top of the window and select "Folder Options">"View" and check "Show hidden files and folders", and then click "OK." The "iPod Control" folder will now be visible.)
Note the music titles will look strange (e.g. GLOV) but when they transfer the full titles and other metdata will display correctly.
4. Open a folder on your computer where you want to save the music files.
5. Drag and drop the music files from the iPod's "MUSIC" folder into this folder. The files will transfer to the selected folder and be saved to your computer's hard drive.
6. If you want to upload into iTunes. Open iTunes. Click File, Add folder to library, and then select this folder you just created.
Follow-up: I also found this wonderful application:
http://www.macroplant.com/iexplorer/features/transfer-music-and-playlists-to-itunes/