Well, I wouldn't say the N7 "works just like the iPad"! It's actually a bit more sophisticated. The Nabi 2's kids interface (they call "Nabi Mode" is more like the iPad as it just shows a list of apps (and folders if you choose.
Apps are definitely important. The Nabi has the advantage of having a whole kids curriculum (math, science, English and social studies) of lessons built into it which are not available on the N7. There might be ways of purchasing some of the same content, but I'm not sure exactly. Regarding apps again, The Nabi can easily install the Amazon App Store, which has 50,000 apps on it, so it's not like they are going to be missing much. There definitely some apps that are so far only available on Google Play, and if those apps are things that you really want, then it's worth taking the trouble to sideload them. I wouldn't recommend rooting for someone who isn't all that tech-savvy, plus it supposedly could void your warranty. The main apps that you wouldn't have access to on Amazon which you would have on Google Play are Google apps, but those also can be loaded from files that are available elsewhere on the net - you don't have to get them from Google Play.
I'd definitely take them to a local Best Buy (or maybe Walmart), but call first to make sure they are on display, and have them play with each and see what they think.
One other thing I should mention is that while Android Central is a great forum for asking questions and getting help on Android devices in general, most of it is geared towards adults, not kids. I'd love it if they would make an "Android for kids forum" and have suggested it, but so far there hasn't been a response. Some people do modify their N7 (and other tablets) for use for their kids and so post here occasionally, but in general, it's not going to be as easy to get answers here as it is for the Nabi. I say that because the Nabi has a facebook page (https://www.facebook.com/nabitablet) which has a ton of activity. I came to it last December when we got our first Nabi and started helping less tech-savvy people with questions. The company, Fuhu, was enlightened enough with me and a couple of other parent who would help out that they made us official helpers or "Fan-a-Techs" and our number has grown to I think 16 or so overall. So generally when you post there any question, you will get multiple detailed answers almost any time of the day or night from us or from the Fuhu employees. They are truly one of the most customer-oriented companies I've seen. I've worked with them behind the scenes as well, and they are coming out with some really awesome kid-centric accessories for the Nabi 2 hopefully in time for the holidays as well. They are really a great company. Google isn't too shabby either ;-) And of course they are huge huge huge in comparison to Fuhu, but that size also means it is sometimes dificult to get a personalized answer or help from them, whereas that is fairly common for the Nabi, which is especially important if you are not particularly tech savvy...
Great info!! Thanks. This all helps me with deciding which is best. Maybe I'll just get the N7 for my 6yo and the Nabi 2 for my 4yo and maybe get the best of both worlds since it's so hard deciding on just 1 tablet. They both sound great, that offer different things. Hmmmm. I really do appreciate everyone taking the time to bare with me and help me along the right path!!