The thing that gets me about the idea of nation-state is some people's purely fictional idea that it is somehow the de facto unit of political relations. As such, everything seems to get reduced to the idea of interacting nations, whilst the actual components of the nation states, it's people, get left behind.
It may or may not come as a surprise to know that nation states are not actually set in stone. The concept of state has only really been around for the last half a millenia; nation less than that.(see Paul Magnette's book on citizenship for a really good discussion of this) The concept of nation state is usually seen as having started with the Treaty of Westphalia, but even after this thinkers were unsure about the viability of a tied people and state. Immanuel Kant, for example, expected the events of the American and French revolutions to herald in a new republic in Europe based primarily on the will of its citizens. After the revolutions, Kant saw no reason why a French of American citizen would put their life on the line for their country - 'For this would mean calling down upon themselves all the miseries of war'. Kant obviously could not foresee the rise of nationalism and patriotism, but the link between nation and state was still not concrete over a century later; the Second Internation gave way to the Comintern after World War One because Lenin had underestimated the power of nationalism to compell workers to fight against each other.
The real link between nation and state has really been a distinctly 20th century phenomena, and even then one which looks like it may be falling apart in the face of globalisation, NGOs and global communication. Multi-national corporations are now larger than some nation-states anyway, and even the big countries like those of Europe have had difficulty reigning in some big names such as Microsoft when it comes to playing fair. The Nation-state is now just one of many actors on a global scale, and it's crucial to work on many different levels as a country to be successful.
Basically, the nation-state is not the be all and end all of politics, and any future development is likely to see the nation state slide even further. Those islanders that think that Britian can bury it's head in the sand, safe beyond her watery borders, are in for a bit of a shock. In many ways we're at a turning point again right now very similar to that of revolutionary Europe and the nation-state is not going to come through unscathed.
Get some perspective, and see the bigger picture, eh?