Bigger screen.
Thinner player.
Genius.
New Colours.
More storage for low(er) price.
Shake to Shuffle.
Curved Design.
That thing when you turn it, the screen turns with it
There's a similar topic in the iLounge about 3rd vs 4th generation Nano's, which may be of some use to you. The prices are about the same (both 8gb Nano's for example can be purchased for £107) Personally I'd opt for the 4th Generation.