Im designing an object model where nested classes are very appropriate. The nested classes should only ever be used in conjuntion with the class in which it is nested in, just like the ListView class, which nests ListViewItems, ListViewItemCollection, CheckedIndexCollection, CheckedListViewItemCollection, ColumnHeaderCollection, SelectedIndexCollection, and SelectedListViewItemCollection.
I think it might give me more of a headache to have so many classes all in the same namespace. Imagine if Windows Forms did not use nested classes. Using nested classes is far from cumbersome, but I cant say the same for their implementation in VB.