Anyone else think that upgrading Nano-Recharge is a little extreme?? Restore to full health after taking damage 500 times? Most the time I die when I take damage.. lol

Try hanging around some team mates. That way you'll get more assists and tons more recharges. I find when i play with friends i can get 100 recharges a night.
Wow.. I've played 7 games with it, and have 11 recharges.. haha

What is the Nano Recharge's upgrade?

You don't have to have Nano Recharge equipped to upgrade it. Notice that you can use another Armor perk but any time you recover from damage it'll be counted on the Nano Recharge.