Give them points for novelty: FatPengy’s iStitch for iPod nano ($20) starts life as a simple fabric sleeve, and is customized using the company’s proprietary Flash-based tool with artwork of your choice. FatPengy then hand-stitches the artwork into the back of the case and sends you the finished product. While our iLounge logo wound up missing a letter, the concept is an interesting one, and the colorful rendition was otherwise impressive.…