Nanobodies provide important advantages over traditional antibodies, including their smaller size and robust biochemical properties such as high thermal stability, high solubility, and the ability to be bioengineered into novel multivalent, multi-specific, and high-affinity molecules, making them a class of emerging powerful therapies against SARS-CoV-2. Recent research efforts on the design, protein engineering, and structure-functional characterization of nanobodies and their binding with SARS-CoV-2 S proteins reflected a growing realization that nanobody combinations can exploit distinct binding epitopes and leverage the intrinsic plasticity of the conformational landscape for the SARS-CoV-2 S protein to produce efficient neutralizing and mutation resistant characteristics. Structural and computational studies have also been instrumental in quantifying the structure, dynamics, and energetics of the SARS-CoV-2 spike protein binding with nanobodies. In this review, a comprehensive analysis of the current structural, biophysical, and computational biology investigations of SARS-CoV-2 S proteins and their complexes with distinct classes of nanobodies targeting different binding sites is presented. The analysis of computational studies is supplemented by an in-depth examination of mutational scanning simulations and identification of binding energy hotspots for distinct nanobody classes. The review is focused on the analysis of mechanisms underlying synergistic binding of multivalent nanobodies that can be superior to single nanobodies and conventional nanobody cocktails in combating escape mutations by effectively leveraging binding avidity and allosteric cooperativity. We discuss how structural insights and protein engineering approaches together with computational biology tools can aid in the rational design of synergistic combinations that exhibit superior binding and neutralization characteristics owing to avidity-mediated mechanisms.