Department of Computer Science and Engineering, University of Washington - The Nike+iPod kit consists of a sensor which is placed in the sole of your left Nike+ shoe and a receiver which plugs into the bottom of the iPod Nano. The sensor in your shoe detects when you take steps (while walking or jogging) and transmits this information to the receiver.
When you walk or run the Nike+iPod sensor in your shoe will transmit messages using a wireless radio. These messages contain a unique identifier that can be detected from 60 feet away. This information is potentially private because it can reveal where you are, even when you'd prefer for a bad person to not know your location.
From Nike... Simply slip the Nike+ sensor into the Air Zoom Moire shoe pocket, or any other Nike+ Ready shoe, and head out. The Nike+ sensor slips unobtrusively into a pocket under the sockliner. Waterproof and virtually unbreakable. $29.00