I'll be using (at least for now) John Gruber's Markdown syntax. I had to apt-get install markdown to get this to work, since that's what nanoblogger uses to preform the markdown markup :p. See

/usr/share/nanoblogger/plugins/entry/format/markdown.sh

Code (delimited with backticks '`'), gets formatted with <code> tags, so you need to set up your CSS with

code {font: monospace; font-weight: bold};

or something to that effect.