It's marvelous that a simple piece of plastic can employ the nose to produce a continuous microtonal range of pitches. The infamous nose whistle (sometimes called a nose flute) owes its success to using the nose as a source of wind, freeing the mouth to serve as a flexible resonating chamber that can adjust to produce the required notes. If that sounds confusing, this video should help clear things up.
Nose Whistle Demonstration
Other kinds of nose flutes are used throughout the world, as shown in the following video.
Vietnamese Nose Flutes
It should be pointed out that the nose has other musical uses besides the mere blowing of air. Notice the subtle and delicate use of the nose as a temporary substitute for the fingers while they are employed elsewhere.
Shnozzage (Etude # 23 by David Rakowski)