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Obviously, size is a personal preference and doesn't make one tablet necessarily better than another. It just depends what you want to use the tablet for.
The nook color has a great screen when it comes to reading. Text looks crisp and clear. The touchscreen leaves a lot to be desired, though -- not as accurate or sensitive as the ipad, especially towards the edges/corners of the screen. It can be a little frustrating. Rooting and overclocking make a world of difference, obviously. The nook color is a tinkerer's dream. (And Angry Birds is free on Android!)
The ipad is on another level as a multi-purpose tablet, in my opinion. The reading experience isn't as good as a kindle or nook color, but you can tweak it enough to make it good (changing font types, size, bold, etc). The app ecosystem is outstanding. Video playback is stronger than on the nook color (the video playback capabilities of the nook color are pretty weak). Everything is faster and smoother on the ipad. Compare pinch to zoom on the nook color to the ipad, and you will understand what I'm saying. Although iOS is simpler and less customizable than Android, the ipad experience is simple and just works extremely well. I spend 99% of my time in apps, so the fact that the UI is basically just an app launcher and nowhere near as versatile as Android Honeycomb doesn't really matter. Overall, the ipad is just a more polished device.
That being said, the nook color is a great device for the price if you want something small and will mainly be using it for reading. I owned both devices and used the nook color extensively after I first bought it. With time, I found myself using the nook color less and less and going back to using the ipad the majority of the time. I decided to sell the nook color because I really couldn't justify keeping it knowing that I didn't use it that often.
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