Rumors are spreading that Apples new In-Ear Headphones are going to ship soon. One sign that might suggest that these new headphones are on their way is the new software update for the iPod Nano. Firmware 1.0.3 is said to come with In-Ear Headphone Support.

- Support for Apple In-Ear Headphones with Remote and Mic
- Support for Apple Earphones with Remote and Mic
- Fixed instability issues when using Nike + iPod Sport Kit
- Added a setting to turn off Cover Flow when rotating iPod nano and a Cover Flow menu item under the Music menu
- When Shuffle setting is set to Songs, pressing play on a song in saved Genius playlist will now follow the Shuffle setting
- After playing a slideshow with TV out, Cover Flow album art is no longer distorted
- Waking iPod nano after hibernating no longer distorts photos
- Other minor bug fixes

You can get this software updat by hooking your iPod Nanos (4th generation) to your iTunes, selecting your iPod under devices and choosing “Check for Update.” [TUAW]