At its annual music-based event, Apple today announced an all-new iPod nano.

The new player is small — 1.48 inches tall and 1.61 inches wide. Gone is the click wheel that for so long defined the iPod. Instead, the iPod nano’s face is defined by a 1.54-inch color, Multi-Touch display. The OS is still in question, even though it sure looks like iOS, and Jobs alluded to it running iOS while describing how to move icons around on the screen.

It is easy to think of the new Nano as a Shuffle with a screen. In fact, it’s just a tiny bit bigger than the Shuffle, which is just 1.14 inches tall and 1.24 inches wide. Both have built-in clips for ease-of-use. Both are small and both have great battery life.

(See Apple’s “Compare iPods” page for full specs.)

Apple has always positioned the Nano as the workout iPod. Equipped with Nike+ for runners, it’s small form factor was easy to manage. The click wheel made it simple to control the iPod, even on the go.

I’m not convinced that the Multi-Touch Nano announced today will be that easy to live with for runners, no matter what Apple says. A click wheel is easy to use without looking at it, a screen isn’t. The existence of volume buttons on the top of the device says to me that the company realizes this on some level. So while adjusting volume should be easy to do by feel, changing songs may not be.

Apple hasn’t shared details on the headphones it will be shipping with the new iPod nano, but assuming they are the standard, simple earbuds (without the controls that ship with the iPhone’s) the only way to navigate music is via the screen.

Engadget’s photo of the playback controls show what appear to be large targets, but glass is smooth, no matter what is showing underneath it.

And even though the Shuffle’s buttons are back, the only two models with Nike+ are the Nano and the Touch.

Yes, the new Nano is pretty, and yes, I’m sure it will sell well, but for a device pitched to athletes, it doesn’t make sense.

Update: Engadget’s hands-on video is up, and reveals the Nano doesn’t have an alarm.

Update 2: According to the online Apple Store, the iPod nano just comes with normal headphones — to get a pair with controls, it’s an extra $29. Lame.

Update 3: None of this even gets into what other functions the iPod nano has lost, including video playback, video recording and games.