I really can't afford both, but I have a nook color and a kindle 3 sitting here. One needs to be returned. The kindle is the wifi only version due to it being significantly cheaper than the 3g version.
Such very different devices. Both have pros and cons.
Let me explain what I do. I read books on occasion, but when I do I READ. So for example I will get the itch, go the book store find a good book in a series and then read for weeks 3 to 4 hours a day until the series is done. Then I won't read again for a while.
The nook color has a really nice screen. Navigation is a pleasure. I love the finger swiping for page turns. The color is nice, and sepia background at 20% brightness looks really good. However, the glow bugs me a bit. Also the strobing from the modulation of leds is somewhat bothersome at certain settings. The weight is such that I must put in on my leg to read as my hand doesn't want to hold it for an extended period. The battery life is sad. 8 hours with wifi off and brightness low. The extra features are awesome. Surfing is great, the ability to root and get a tablet is very nice (though battery life is not good for long term use this way).
The kindle does nothing. However, with a san serif font, and good lighting this is pleasure to read on. I do not like the buttons though. I feel the page turn buttons are less than stellar. The clicky is annoying. The black to white thing is a bit distracting though I find it becomes acceptable with reading time. This device is just easy on the eyes and a good read. I find myself able to read without thinking about settings. That makes it ideal for an anal retentive guy like me. But the device feels limited to some extent. Part of me says this is perfect for a reader and part of me has issue with spending $140 for a device if this is all it does.
Anyway I like both in there own way. Both have pros and cons. I must return one and honestly am tempted to return both to wait for the next thing. But I feel I want to keep one.