[ame]http://www.youtube.com/watch?v=YA9qcY-G3O0[/ame]
It seems as though almost every iPod Nano has had this diagnostics mode. This is a mode where you can run tests to see if everything is okay, as well as tweak your device if you know what you are doing. Nothing too special here, just a cool thing to poke around in. Something useful in this mode is it will allow you to use your iPod as a storage device like a USB drive. You can simply get out of this mode by clicking the "standby" option.