Internal hub ?
 

Specifically a shimano nexxus 8 hub. Do I need horizontal dropouts, and if not do I need a special tensioner? tia :)

You need horizontal dropouts, OR a chain tensioner, OR you need to find that perfect front chainring/rear sprocket combination for the correct chain tension, OR buy a frame from http://steelwoolbicycles.ca/ with an eccentric bottom bracket shell.

Basically an internal hub is the same as a single speed bicycle in setup.
See what Sheldon has to say about single speeds and fixed gear.
http://sheldonbrown.com/singlespeed.html

A Shimano Nexus 8-speed hub will work on a vertical dropout bike. Its not as simple as saying, 'its the same as a single speed hub'. Various components of the hub need to 'indexed' or 'aligned' to properly function. Verticlal dropouts vs. horizontal vs. reverse dropouts all poistion the mechanisms in a different orientation.

To account for these differences Shimano provides a variety of 'ant-turn' washers, which in turn properly orient the hub various mechanisms.

Refer to this link: http://bike.shimano.com/media/techdo...9830600211.pdf for installation instruction including washer descriptions.

With vertical dropouts, as d2create mentioned, you'll either need:

1. That magical tooth combination or
2. A chain tensioner.

That being said, I have 4-speed Nexus 'freewheel' setup and cant say enough about it.

Jim