It can be hard to avoid; and having the community put together a PEP-8 style "best practices" to avoid creating nested code is one of my fondest dreams.
That said, I've written my fair share of [spaghetti code](https://github.com/chrisdickinson/tempisfugit/blob/master/li...) in Node, mostly because JavaScript seems to lend itself to slapping together nested callbacks without slapping you on the wrist for writing unreadable code.
In my experience, the best way to cut down on spaghetti code is to design your API around the [EventEmitter](http://nodejs.org/api/events.html#events.EventEmitter) object. Consider this adaptation of the linked spaghetti code: https://gist.github.com/f8533ff57844b1e54558
Note that in the application code, there are no nested callbacks -- they're merely concerned with validating the incoming data and passing the baton on to the next responder. Bonus points: the methods are in the order of their ideal execution. Clients using the code can just do the following:
var validator = new RepoPathValidator(path);
validator.on('data', function(repoData) {
// do whatever needs to be done with the repo.
});
// redirect all errors to console.error
validator.on('error', console.error.bind(console));