Since Apple announced the iPod Nano 5G on Wednesday, there has been a lot of talk about whether or not the included video camera will be enough to kill off Pure Digital’s Flip line of video cameras. The editors at NewTeeVee set out to answer that question, and came up with a pretty clear winner: the Flip.

Now I can’t say I’m surprised. The camera in the new Nano is so bad that Apple doesn’t even want you taking pictures. But words don’t really do the two cameras justice. In order to understand the differences – just how bad the Nano camera looks, and just how good the Flip (which is not an HD model) looks by comparison – you need to see the NewTeeVee video, which I’ve conveniently embedded here.

As you can see, the Nano looks truly terrible. The picture is overexposed most of the time, does not handle any sort of lighting transition very well, and the resolution is terrible. The videos will look decent on the Nano screen, but anything bigger and you will be hugely disappointed. By comparison, the Flip SD looks great – it handles different lighting well for a cheap camera and the picture is crisp and maintains decent color.

I’ll be curious to see Apple’s response to this situation. I think we can safely assume we’ll see more and more of these videos around the web in the near future, with more and more of the same reaction: Apple really dropped the ball on this one.