I have listened to the nano, and it sounds a lot better than the 4th G. Some how it seems like the nano has more bass than the 4th G. Moreover, I think it is also less rolled off.
To answer your safe listening level question, the SPL varies. For example, if you're goign to listen to music for only an hour, it is perfectly okay for you to listen at 100 SPL, which means about 75% of the bar. However, after that hour, you must give your ears a rest. If you plan to listen for a long time, plan on staying around the half way mark of the volume bar on the iPod. 85 SPL is very safe, you can listen for 4+ hours non stop on 85spl and be perfectly fine. So to answer your question, stay around the half way mark, that is very safe for the nano w/ the Super.fi 5 Pro.
However, keep in mind that sound waves have different energy levels. For instance, bass energy is more perceptible, you can actually feel it, while treble energy is not so noticeable. If you change the EQ to have more treble, the spl level will go up. So turn it down a bit. Don't think that if you hang around the half way mark (of the volume bar), you can jack up the treble and still be at 85spl. Basically safe listening for 4+ hours = No EQ in iPod nano @ half way mark. If you EQ, turn it down just a bit. But i'm talking abotu 4 hours here, I don't think anyone listens for 4 hours straight =D