For those of you following...
I got my children's books working on my Nook Color
I had to reinstall Adobe Air apk.
I think I had tried upgrading it from the market at one point and this broke the children books since it seems to use Air to play the books. Found a post about it on Xda forums.
http://forum.xda-developers.com/showthread.php?t=872136
Im back in business! W00t!