well, i didn't try for very long, but i tried my 4 GB 2nd Generation Nano on XBMC 2.0.1 and it mounted after 2-3 reboots of the Nano. However, when selecting it as memory unit under music and file explorer, the folders were gibberish and it would not let me select anything. (i also have my ipod to "manually manage music" and "enable disk use" which should be the better settings for use in xbmc i would assume)
and, no, nothing was harmed in the process - but i would still have your nano backed up just in case...