When I bought my Nook Color, the B&N salesperson gave me a printout telling how to get books from my local library using
Overdrive and Adobe Digital Editions. They have quite a few recent books available for 21 day checkouts and if one is not available (only one copy can be shared at a time) you can put your name on a waiting list. It sounds like many public libraries offer this service.
Since my NC is rooted, I installed the Overdrive app from Android Market, which is even easier than using Overdrive on a computer to install a book.