as far as audio formats are concerned ipod supports all major codecs except wma.I dont think its huge problem because 99 percent files are mp3 anyway
D2+ lacks aac and more importantly GAPLESS PLAYBACK means there will be some lag between 2 tracks which is big minus with D2+
The problem with video on the D2+ is that the supported formats (AVI and WMV sized at 320x240) aren't as common on the web as the H.264/MPEG files that are standard for most video podcasts and work natively on the iPod and Zune. More often than not, you'll need to convert video to play on the D2+
As far as sound quality is concerned both are above average.I think choice is subjective because both have different signatures.Ipod is cleaner,natural and more balanced.D2+ is more tweaked,better equalizer,fun to listen with little bass roll off and more hiss than nano.
nano has extras like cover flow,genius,VGA video recording,much better UI etc
D2+ is twice heavy and thrice thick compared to nano
whoa!!!!
you say:
D2+ and ipod are above average. (though half of the statement it true) 
ipod supports all formats except wma
AVI is not as common as H.264
ipod sound is cleaner, balanced and more natural.
ROFLMAO!!!
every sane person ridicules ipod for not generating clean and balanced sound.
This explains everything. Now, Here is what I feel.
1) Display, cowon D2's 2.5" 16M touch display pwns nano's 2.2" display
2) Battery life: cowon d2 give 52hr audio and 10hr video time. for ipod, that's a dream
3) audio: D2 has the best audio quality in PMPs and it is far far better than that on ipod nano. am still laughing when you said that it's quality is comparable to nano and average
4) Memory expansion. if you feel that the inbuild storage is not enough, just insert a SDHC card and you get extra space
5) MSC/MTP: no need to depend on itunes. you can either drag and drop or use any media client in any OS, be it linux or windows.
6) support for FLAC. this is considered as one of the best audio formats for music. try this on a good set of headphones and keep drooling. AAC cannot even touch the quality that FLAC/OGG can attain.
7) 76mW max output that can drive every single premium full size headphone without dropping a sweat
8) it may be bulky but beats nano in every department.
8) custom equalizer, clarity,bass, 3D, stereo enhance, MP enhance and many more audio setting mean that you can setup the exact audio effect that your ear likes. Now, I think this one is much more useful than gapless playback and you think that lack of gapless is a BIIIG problem?? lol.
9) genius playlist, well. let me see what it generates for tamil, hindi and telugu songs. hahaha.
10) coverflow and UI: my D2's touch navigation pawns ipod nano's coverflow and UI. No need for me to keep rotating my thumb in circles if I have a thousand song playlist to go to middle of playlist. One single touch in the middle of scroll bar and I land right at the center of playlist. Too much for coverflor and super UI. right?
I had been an ipod nano user for 3yrs. During the first two years of ipod nano usage, I used to think that nano was the best music player ever made, till I heard audio on Creative Zenvision:W. Even Transcend T.Sonic 610 gave much better audio than my ipod nano when I hooked them to ATP3 and played same song. And then I bought cowon D2.