Do this but for different shapes and sizes. My iPod cavity is 1 cm bigger in every direction than the iPod, and the earplugs cavity is as big as there is room for after the iPod. Make the earplugs cavity deep, most of the way through the book. The iPod cavity depends: will the iPod be going in by itself? In that case just as deep as iPod. If you put in foam, deeper: my foam was just as thick as the Nano. I cut one layer in half (to go behind/undermeath the Nano, and on the inside cover) to get two thin layers, and one layer just to go round the edges, so I wanted the Nano cavity as thick as two layers of foam.
Cut a very shallow cavity for the Velcro strips. Cut channels between the compartments as you see fit.
For the cutting I strongly recommend that you go slowly, especially if you will leave the edges plain. Especially as you go deeper, the edges will become nasty and untidy. I didn't bother too much with this one because the insides of the holes would be obscured with felt for the plugs, and foam for the Nano.
Buy a metal ruler and a couple of clamps (small lightweight plastic cheapish ones are fine if they work) from the hardware shop, and use them to clamp the ruler on tightly when you cut. Take a break when you are frustrated. Buy one of those Stanley knives and a couple of packs of spare blades. Learn how to snap them off when they get blunt (the base of the handle - the black part if it is an orange one with black bits - has a slit in it to hold the end) and snap off a tip EVERY time you think it is starting to get blunt. Don't try to make the blades last longer to save money.
Then I glued in the bottom thin layer of foam: the iPod's 'bed'/mattress. This doesn't have to fit perfectly.
Then I got the full layer of foam and cut it to fit well, and cut an iPod-sized rectangle out of it. So I was left with a 1cm-wide border/ring to go around the iPod. I cut out the small hole at the bottom right of this for the earplugs to go through. Then glued it in. Tip: the edges buckled in when by itself: to get a really perfect fit wrap up your Nano in plastic wrap/Glad wrap and put it inside the ring/border as it's being glued. Leave it in there while the glue dries.
Glue down the front page as per the instructions. Don't forget to do the Velcro whenever you prefer.
Then put the second thin layer in place on top of the Nano inside the cavity. Paint the top side with glue. Close the book and leave the top layer of foam to stick to the inside cover.
Cover the earplug compartment with fabric if you like (felt's good). I recently sourced some flocking (can't believe I had to import it from the United States) and will use that for the inside compartment in future (after straightening the sides with polyfill or something similar). The felt is imperfect but good enough.
Choose a nice book, NOT a paperback. I would use a smaller piece of Velcro next time as this was too sticky, and to open the cover I needed to pull very hard and the cover bent slightly so that a vertical line down the middle of the book slumps inwards, and the right-hand edge of the front cover pulls away slightly.
Don't clamp directly on to the book, the edges will dent the outside: put something on top to buffer.