To put it simple, "rooting" is the action of giving you super privileges on the device; it could be your cellphone or on this case, the Nook Color.
When you buy the Nook Color, it is running a customized version of Android operating system, one that is locked. Such restrictions (made on purpose by the manufacturer) won't give you access to Android Market and capabilities like install new applications or remove the existing ones. The root privileges (know as root because in Linux/Unix is the most powerful account) will overcome such limitations, hence the definition or reason for the "rooting" word.
Rooting won't convert your device in your dream hardware but it is the 1st step to run additional scripts in order to alter what was brought to you as original device.
Now, while rooting, you can accidentally bricking your Nook Color (or cellphone, or whatever the device is) making it unusable for good. The rooting process also won't warranty you that your device will use same battery consumption because the CPU usage can go up, decreasing the battery life or even overheating the system on some cases, like when over-clocking the CPU (making it run faster)
Last but not least, the Nook Color was tested and design "as is", not to operate rooted. Because that, any rooting process can potentially void warranty and you are basically on your own, with no B&N customer support. That does not mean is not possible, lot of people do it here, but is not endorsed by B&N.
Last edited by jocampo; 02-03-2011 at 02:28 AM.