Docking cradles are more convenient if you connect your ipod frequently, but apple charges way too much for them. The ipod nano is especially easy to make a cradle for because it comes with a plastic insert to make it fit larger docks. With this, a cable, and some Plexiglas you can make a dock.
The first step is to disassemble the cable. The plastic pries off, leaving you with a metal shell. This is held together by latches which can be bent out of the way, leaving only the connector and wire. Removing the metal shell also gets rid of the hooks that lock the connector into the ipod. These are important to get rid of.
I wanted my dock to light up, so I stripped off some insulation and soldered on wires to the ground and +5V wires. I added a 100 ohm resistor in series. I connected these wires to a white LED, which I ground down to diffuse the light.
Hold the ipod securely and cover the back of the connector with a generous amount of glue. I used hot melt because itís easy to work with, but I think it is the best for this use because some touches the ipod through the gap. With hot melt, you can easily pull the ipod off and you have no problems, while stronger glues might damage the ipod. After the glue hardens you can pull the ipod out and the connector is perfectly aligned.