Nike and Apple team up

From the pictures, it looks like the sensor is just set in a hole in the padding of the shoe.  You can take it out and put it back in under the insole.  It might work if you cut a small hole in the same place in the padding of any left shoe and then put the sensor there.  I expect that someone on the internet will try this once it's available.  Heck, if I had a Nano, I'd try it.

After some more reading, I also found out that the battery in the sensor is not replaceable.  So, we're back to things like the old Polar HRM straps. 

The simple ones, like you see old ladys wearing on their waists during morning power walking sessions, you program in your stride length.  Everytime the unit bounces, it counts a step and multiplies that distance by your stride length.

More advanced ones are accelerometers.  They measure how fast the foot is accelerating in various directions.  They count the step when the acceleration goes back to zero (foot strike).  It times this whole process, so it generates a time vs acceleration profille and can tell when the foot started motion, when it peaked at the halfway point and when it struck the ground at the end.  Using some look up tables based on normal bio-metric curves (normal foot motion while running), it can appoximate how far your stride is and how fast you are going based on the amount of acceleration, the arch and the time it takes to hit those key points in the stride.

Nice explaination Matt.  Thanks.  Now I feel slightly less stupid.

depends on the unit.  They should list the accuracy somewhere in the specs.  The hip mount basic ones are limited by the accuracy of your step.  If your stride is exactly the same for the entire run, then they can be spot on.  The  Polar foot pod is a pretty beefy acceleromoter and boasts accuracy fairly close to that of GPS.  The airforce uses accelerometers as back up navigation systems that they use to verify GPS tracking.  So they can be quite good or not so hot.

You're probably going to have to wait for reviews to come out to get an idea of how accurate it is.  Even if it wasn't accurate with distance, just having something that could regulate the BPM of my music or select different songs based on intensity would be nice to have.  Especially since I wouldn't give up the 3d tracking or HR functions of my garmin.  I think apple needs to ditch Nike and go with garmin.  Throw 1G of flash memory in the new 305 and a set of wireless ear buds, then use the same ability to build a custom workout with certain songs....  I would jump all over that.

The only model it will work for is the Nano (the transmitter is made to fix with it's smaller dock connector).  As a caution, I would advise against running with your iPod video.  The bigger iPod models (ie, not the Nanos or the Shuffles) have hard drives instead of flash memory.  Running with them can cause the hard drives to lock up if they get bumped too hard while they are spinning.  My husband actually did this with his and the hard drive was completely fried.  We could have replaced it, but it was basically cheaper to get a new iPod.  The Nanos and the Shuffles don't have hard drives, so they are much better suited for running.