I think like some others that the iPod touch/iPhone is the iPod's (in a traditional sense) replacement.
Nanos will probably stick around for a while, because of the portability, but I think they will be less common. Maybe Apple will change the name to iTouch since a lot of people are already calling it that (bothers me a bit personally, but I could see Apple doing this. They changed their company's name recently, afterall)
It's also important to distinguish what the woz is defining as an iPod. It sounds to me like he is referring to the standard model, now called the classic. The biggest one, with the most storage. I don't think anyone would disagree that the classic model is on it's last leg, and probably only has one more generation ahead, if that (that would be 8 generations of iPod!! iPod 1G-5G and iPod Classic 1G-3G)
Honestly, it's already happening!! Think of how many more people have bought a nano or touch/iPhone than iPod classic. I've only known one person to get classic, but 4 or 5 that have gotten the nano, and even more that have iPhones and Touch's.
The key factor in the phasing out is the development of flash storage, which is happening pretty rapidly. Once they can get a flash chip roughly the same size as the
8GB chip in the new nano 4G with 64GB or more of storage, they will probably stop making hard-drive iPods all together. Better for the environment, lower production costs, higher margin - it just makes sense.
Personally, I think we will probably see the last gen of the iPod classic around August '09, and by 2Q 2010 we will be looking at the new iPod nano, in 32GB and 64GB, and the official abandonment of the classic