FWIW, I've been running CM7.0.0.2 for awhile now and it, quite frankly, runs perfectly, in my experience. I'm running it from an 8GB Class 10 SD card (<=8GB class 10 cards do not seem to have the problems of the larger class 10 cards) and it screams. With the Quadrant benchmark CM7 is about double what (rooted 1.1) Eclair benched at. A really significant improvement.
The NC is so good, I just bought my wife one (at her request) for Mother's Day. I hope to have it rooted by then, with the full Android Market. Need to get a 32GB card for her for video and music.
The only reason I don't load CM7 (internally) on the other one is that it doesn't run the internal Nook Color reader app, which is, IMO, notably superior to the Android Market Nook app.
So for awhile, I'm going to be running back and forth between 1.2 (rooted, of course) and CM7. For the NC, and as a tablet OS, I prefer CM7 (Android 2.3.x) over Honeycomb. Honeycomb just doesn't feel right to me on the NC (I've run v.4 on a SD card).
Anyway, I'm looking forward to getting 1.2 rooted so I can benchmark it compared to 1.1 to see the improvement from there and then compare it to CM7.
Scott