[Apple iPod] Understanding the Nano, is it right for me?

Hi everyone!
It is the holiday season and my husband is bothering me to make my
decision in what I want this year.
I saw the Nano and wondered if it is something I should get. I am not
a huge music person, aside from when I am in the car..but we have a
toddler and I thought about putting some music on it for him to listen
to. He loves music. I have a few games that I would like to play on it
as well.
My questions are:
Can you watch a movie on it while it is sitting on the charger?
Is the charger the docking thing?
Does everything come with it in the box (everything you need to
download from computer to Nano, also software)?

I have thought about the PSP also.

Thank you for your help and suggestions.

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