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Cheap iPods can often be found on auction sites such as Ebay or listing sites such as Craigslist, and on occasion sites such as Amazon with user-sales.
The cheapest iPod Nanos can be found from many different stores and retailers. Some examples that sell cheap iPod Nanos include BestBuy, eBay, and Amazon.
You can find really cheap ones probably from ebay.com. But you need to be careful about the authenticity of the product. You can find deals from stores such as Wal-Mart and BestBuy.