Trying to deal with several issues by different posters in one reply, so please excuse me if I miss something.
Bill: Yes, it's difficult if the nanites are made of the same material you're manipulating, and you would hope to avoid this whenever possible, but by using inclined planes, levers, compression versus tension, etc. you might still be able to do a surprising amount of work.
Heat is a byproduct of the energy used to power the nanites.
Today's reactor capabilities are tomorrow's shirtsleeve capabilities - unless you 'bottom out' on the fundamental laws of nature - and this is the crux of my argument: I'm not sure that nanite goo will bottom out.
A billion nanites is a very, very small number. The average splodge of goo would probably contain billions of billions at least.
Klaus: I'm not sure we've reached the Laws of Thermodynamics yet, much less had anything proved by them.
Never is a very very long time. One day, tiny machines may far exceed the capability of viruses.
Arthur: The crux of my argument (about nanite goo not bottoming out) is to question whether nanoscale machines would need the equivalent energy to raise a meter scale object by 50 degrees, or whether the energy needed to break enough bonds in enough time is many orders of magnitude smaller than this.
For example, in Nano-Weld paste, the nanites will only have to work around the edges of the paste to stitch molecules together - a 'thin blue line' a nanometre thick, whilst the rest of the volume absorbs and radiates heat.
By comparison, a lump of thermite breaks all the bonds throughout its volume almost simultaneously, and yet if you drop that thermite into a cubic meter of water, you'll barely register the increase in water temperature.
I'm still not convinced that the amount of energy needed to break and make chemical bonds in a reasonable timescale is so great that it will melt the nanites (this is what I understand by thermodynamically impossible). And even if you could prove it to me, I'm not going to be able to prove it to neanderthal players (present players excepted, if you're lurking, guys - I'm talking hypothetical players here). So interesting as the discussion is, it's not really getting me anywhere.
Fat fingers may actually be a more fruitful path, but I don't think that will be a panacea either.
I need to complete the following sentence with cast-iron finality in not more that twenty words:
"there's no grey goo IMTU because..."
and I reckon I'm still stuck with "there's no grey goo IMTU cos I say so."