haven't seen any official confirmation but it's seems from this blog it'll be using the TI OMAP soc A9 IOW's WOW!!!!!!!!!!!!!
Underneath its full-color covers, the Nookcolor is outfitted with an OMAP system-on-a-chip (SoC) processor from Texas Instuments, based on an ARM Cortex A9 processor. The e-reader runs a custom build of Android 2.1. “When we first started working on a color Nook, Android 2.1 wasn’t available yet,” explained Jamie Iannone, a B&N executive VP, speaking with me at the launch. The Android 2.2 upgrade will include the addition of Adobe Flash, too.
http://technologizer.com/2010/10/26/nookcolor/
This would be amazing this would compliment the rest of the high end features perfect.
If this is true, which nothing is confirmed then this will be a steal.