I use the iPod Nano which to me is far superior to the iPod in a motorcycle application since it has a flash drive as opposed to the hard drive on the iPod. I hear of some guys saying their iPods lock up and have to be rebooted when you would not have that problem with a Nano. Also now that they have an 8gig Nano storage is not an issue. Another plus is the smaller size of the Nano. So all that said please see if you can get these vendors to do a handlebar set up for a Nano. I think there would be a lot of demand for that especially if they did a mount that allowed the Nano to be mounted on the bars too for easy access.
Well for starters, I didn't get a Nano for Christmas

, if it was my choice I probably would have opted for the Nano for exactly the reason you mentioned, hard drive vs flash.
Both use the same connector, so hopefully whoever would do the interface it will work for both.
As a test I will try my wife's Nano in my truck later today. I currently have an adapter that connects directly to the radio, and can be operated by the radio or steering wheel controls.
I have only had mine lock up once, problem is to reboot you have to stop riding and do some keypad manipulation.
As for the smaller size, that does not seem to be an issue, I actually like the bigger screen om my 30gig video, much easier to read.
I use a "tech Mount" for my iPod and GPS
HD-Dude told me of someone using a repeater for the iPod.
My wish, a break out harness for the iPod that is controlled though the radio, a wire long enough to mount the iPod somewhere where it is out of the weather and a repeater up on the dash so I can choose the tunes. The new HK radios may already be able to display the info.
The easy answer would be install an aftermarket iPod ready radio, with an auxiliary input for my GPS based XM radio and the adapter that allows the handle bar mounted controls to operate the radio.
I just ordered a bunch of Hawg-wired stuff from Jim, so after I do all that work I may end up pulling the factory radio and putting in one of the above mentioned Sony-iPod ready radios.