A little information
I too have had some difficulty finding what I wanted on several forums. Too much information, and sometimes something missed. I consider myself well schooled in windows, but am also a novice in android--that is why I purchased a color nook to play with. I have not rooted the nook as of yet--the articles on this site are great, and the help from most people is greatly appreciated.
I decided to boot from an sd card for the time being. I have run android 2.2, CM7 and 3 from an sd card boot. I did not really care for 2.2--a little awkward, but still ran rather well. Loved 3, for its interface, but really not ready for prime time---slow with some glitches. I am now running CM7 and find it really good. Probably would run faster from nook memory, but ok for what I do. Market was easy to install, and works great. Have downloaded many apps from both market and amazon apps. The apps install on the sd card. I am using a class 10, 8gb card, and it seems to work well. I have not investigated how the card is partitioned--a member said four??, but there is considerable room for additional files to be stored for reading by the nook. You are able to access the sd card from your nook. I had dual boot when running 2.2, but have not found a source for this for CM7--probably already done, where??? Like I said a novice. Since the nook boots from sd card, and you wish to use files that are stored on the card for reading with your nook, you would have to install your card AFTER your nook boots. Hope this helps some.