Richie: N narrow gauge, using Z gauge trains, does exist, and I have some on my layout. Nn2, as far as I know, hasn't been done commercially, and I've never seen pictures of a working model, but Nn3/m/42" is quite practical.
True N scale narrow gauge track would be very nice, and some affordable narrow gauge locos, but handlaying track isn't any harder than in standard gauge, and kitbashing N bodies for Z mechanisms isn't too hard. there are some kits, with most of them available from Republic Locomotive Works.
Here's an old picture of a couple of my gons: