I rooted the Nook Color and it is terrific. Great use as a ebook reader and general tablet. It seems to strike a very good balance between a pure ebook reader like the kindle and the iPad. We have kindle, nook color and the iPad at home. The iPad is useless for holding and reading more than 20 mins. My wife can't pick it up for more than 5 mins. The Nook Color is lighter than the iPad but more functional (browser, apps, zoom in/out) than the kindle. Downsides are -- rooted it is still android 2.1. Moving to 2.2 or 2.3 is not easy (I believe moving to 2.2 required turning off the heat sensor!!). Honeycomb kinda runs in a debug mode (ie., very slow). If the community can create a painless way to move this to android 2.3 it will be a great win.
As to the economics, B&N owns the retail distribution of this product. So a big win over other android tablets is that it doesn't need to tack in another 30-40% markup for retail stores. Apple makes at least 30% on the iPad and the iPad is bigger with much higher BOM costs. So at $250 it is very likely that Nook color is making a decent profit for B&N. B&N has a winner on this one, they own the distribution and don't have to pay for the software development (at least the majority of it).