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Moreover, how do you fill nail holes in paint?
From the hardware store you will need spackling, fine grit sandpaper, either a compound or putty knife, and paint (assuming you are painting the walls). Put a little spackling on the knife and apply it to the hole. Use the straight edge to scrape away any excess from the wall. Allow this to dry, and repeat, if needed.
Considering this, how do you fill holes?
Tiny nail and screw holes are easiest: Use a putty knife to fill them with spackling or wall joint compound. Allow the area to dry, then sand lightly. Anything larger must be covered with a bridging material for strength before patching compound can be applied.
Nail holes in interior walls can generally be filled with shrink-free spackling by overfilling the hole slightly, then sanding smooth once it's dry. Holes in wood trim are best filled with wood filler. Nail holes in exterior surfaces, just as with cracks or gaps, can be dealt with using a good caulking.