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Nostalgia plays like any other turn based RPG. You explore towns, talk to people and fight through dungeons. Everything is controlled by the d-pad and the A,B, X and Y buttons. There is no touch screen support at all which is a bad thing for Nintendo DS lovers. In Nostalgia, you explore the world map with your air ship. While flying around, you have turn based battles with enemies and other air pirates, kind of like Skies of Arcadia. The air battles are really just the same thing as normal grounded battles only the ships fighting and not the characters.
One good thing about Nostalgia is you can save anywhere in town, but not in dungeons. However, save points in dungeons do restore your HP and MP, which can be extremely helpful in this RPG.
Battles in Nostalgia are like any other generic turn based RPG + a steam punk vibe. Each character has normal attacks and special attacks which take up MP. You also have a healer and a magic user in your group (eventually). There is a system for learning skills that is a bit different from other games (a lot like the skills system in Xenosaga). You earn skill points in battle that can be used to enhance skills and acquire new ones. Sure, it's not revolutionary, but it is nice to have some control over molding a character, no matter how small.