The switch is actually a micro switch under what you most likely were looking at. Was the iPod dropped or wet at some point? There may be damage other than the switch if so, possibly to the logic board. I would take it to a professional if you have never repaired iPod Nano's before as they are one of the most difficult repairs. The switch you are talking about is connected to the logic board by a thin fragile ribbon cable. It is possible to replace the switch but it requires you disassemble the entire iPod. You can see the parts and more in the teardown here:
iPod Nano 4th Generation Teardown
As I have stated in earlier posts the 4th and 5th gen are fragile. Go slow and very very careful if you should attempt this on your own. Be prepared to replace more than just the switch. Parts are cheap but watch how you not only take it apart but also how you put it back together. Good luck and please let us know how it goes!