I have the original 4GB iPod Nano (released in late 2005, bought in early 2006) and I'm currently at 2.7 GB full, however 2.1 GB is music, and the rest are Podcasts and pictures. iTunes says that I have 508 songs on there which would make sense considering it can hold a max of 1000. I am thinking about upgrading to one of the classic iPods soon, however, after I buy a new HDTV.
Tracy, I think what name is talking about is that he was importing all of his CD's to iTunes. When you install iTunes to your PC, you can put your CD's in your disc drive, iTunes will load them and ask if you'd like to import them, which basically means you can open iTunes at any time and play songs, no CD required.
My Nano can also play songs by artist, album, or in alphabetical order. Even randomly just like the Shuffle.
So I'd go with the 8 GB Nano, but it's really whichever one you'd like. I like the Nano simply because it's portable and easy to carry around.