How should I properly format my iPod nano 5th generation?
The best way to handle an iPod Restore is to do it from iTunes.  

iTunes knows what it is &amp; how to format it - it will even actually format differently depending on whether you have iTunes on a PC or Mac, to enable easier file handling afterwards.


If it's a model with a lock switch at the top [red dot visible] switch the lock off first [white dot] - Some models will crash if you don't.
Plug it into the computer, launch iTunes if it doesn't launch automatically.
Click the device icon in the top bar, choose the iPod if you see multiple devices listed.
Click Restore. Follow the onscreen instructions.
You will need to resync afterwards.