Those who insist that nauseous can properly be used only in sense 1 and that in sense 2 it is an error for nauseated are mistaken. Current evidence shows these facts: nauseous is most frequently used to mean physically affected with nausea, usually after a linking verb such as feel or become; figurative use is quite a bit less frequent. Use of nauseous in sense 1 is much more often figurative than literal, and this use appears to be losing ground to nauseating. Nauseated is used more widely than nauseous in sense 2.
Instead what they do is all sit together and feel really bad, and pray. Nobody does anything as nauseous as try to make everybody all pray together or pray aloud or anything, but you can tell what they're doing. —David Foster Wallace, Rolling Stone, 25 Oct. 2001
She looked slightly nauseous, as though she had just watched someone being sick. However, when she drew out her wand and pointed it at Barty Crouch, her hand was quite steady. —J. K. Rowling, Harry Potter and the Goblet of Fire, 2000
She unleashed, too, an olfactory effect of such nauseous potency as to make him gag and retch. —Salman Rushdie, The Satanic Verses, 1989
Personally, I think that writing must be a bit like pregnancy: It begins with a microscopic idea that with time grows and takes shape and comes alive. And often, when I get up in the morning and look at what I wrote the night before, sure enough—I become nauseous. —Mike Nichols, Life and other ways to kill time—1988
Ermyn didn't take sugar, but she sipped the nauseous solution bravely, incapable of rebuffing a kindness. —Alice Thomas Ellis, The Sin Eater, 1977