Looking around, if you don't want to reflash, apparently you can delete a file called accounts.db and reboot. You would need a root-enabled file manager to do this, ES File Explorer can do that - you have to alter the "Settings" though to give it full access. Or you could just change your password, though that is not a very elegant solution.
Of the apps that came with Touch Nooter, there is one called DeviceRegistrator and one called Oobe Reg. I think both can register with B&N, but the second version seems simpler. The first one has two sections, "Device Options" and "User Options", for registering, deregistering and authenticating. However I don't know exactly how it works (presumably you enter the right details and press the appropriate button...). The second one just dumps you back into the native registration app. Not sure where it would start after deregistering, hopefully right at the start. (With me it starts partway through.)
I think you lose data when you deregister normally (sideloaded books etc), but I am not sure of the complications with a rooted device and these apps. Anyway, back up everything using a backup app, to be certain.
Your friend will definitely want to hook it up to Google, and probably to B&N also.