Wi-Fi is perfectly fine - I can browse the B&N eBookstore, although I haven't tried a direct purchase from the nook, for fear of B&N detecting that I'm not in the US. I always buy while switching on Hotspot Shield on my computer.
The Wi-Fi for the web browser works perfectly fine.
Overall, I find the nook perfect for my needs. I don't really annotate much, I just read & maybe the occasional Sudoku or chess with my friends. It's sexy and very easy to use. The LendMe feature was also very cool, someone on the MR forums lent me a book that I've been dying to read.
Browse through the MR nook subforum, you'll find more interesting insights by the very intellectual people here.
The only drawback is the unavailability of 3G access - not that it's important, since it's only useful for browsing the eBookstore. The rumored Wi-Fi-only model is coming out, and it's cheaper. So if you want to save money, I suggest you wait for that one.
All in all, I have no regrets buying the nook. And an awesome Alice Cover in Paper
on the way, I'm happy!!