Do not use the ManualNooter 4/28 from XDA - it will cause you a lot of grief - the devs have not been able to fix the market (and basically the sync with your Google accounts) - it is not ready for prime time and there appears to be much confusion with many posters claiming various degrees of success.

You will have to be patient OR, you can run CM7 from an SD Card and keep your Nook on Stock 1.2 internally. I do just that and whichever one I ujse it runs smooth as butter.