You can continue to use the floss, however just plan to clean the floss EVERY SINGLE DAY. You must clean the floss regularly to remove the solid wastes before it decomposes and dissolves back into the water. A mechanical filter is useless unless it is kept clean.
A very good link just to give you some additional clarity on reef filtration is:
http://www.marineandreef.com/shoppro/filters.html
The most common mode of reef filtration IMO is the reliance on biological filtration through live rock and a good base of live sand, usually about 2 inches deep. Generally, it is recommended that you have anywhere from .75 to 2 pounds of live rock per gallon. In a nano, about 1 pound per gallon is sufficient considering that corals are generally attached to a rock base, which with time will increase the amount of LR in your tank.
Along with the live rock and live sand, one usually has a foam fractionator, otherwise known as a protein skimmer. There are several kinds of models that use different means of doing the same thing...creating a fine bubble spray in a chamber that attracts the dissolved organic compounds (and pretty much everything else) before they break down into toxic ammonia and nitrite compounds and raises it up into a collection cup where it can be easily removed from your system. Again a good link for education on these is:
http://www.marineandreef.com/shoppro/pr ... mmers.html
The detritus that settles to the bottom of your tank is generally trusted to a "cleanup crew" made up of a combination of snails and hermit crabs. The most common include blue-leg and scarlet hermits (usually 1 per 1.5 gallons) and nassarius snails (1 per 2-3 gallons). The other snails, such as margarita and ceriths are ideal additions, however they seek out the algae on the glass/rock more than the detritus.
Many people use the refugium method with frequent water chages in place of a skimmer. Generally, with nanos, they turn their HOB filter into a refugium. These replicate the sump filter used on much larger tanks. This includes the introduction of live rock rubble and macro algae along with a small amount of hermits to the filter in place of other filter medias. There is a small light attached to the refugium to help grow the beneficial macro algae. I don’t use utilize this method, so I cant supply you with very much info on this topic, but it does work very well and is probably a good choice for you system.
Here is a link to a good DIY project to convert a standard HOB power filter into a refugium.
http://www.nanotank.com/forum/viewtopic.php?t=1768
Hopefully this helps you out and feel free to ask any more questions that you have or that by be created by all this info. We are all here to help out. :smartg