If you're stock is 1.01 - You could install CWR following these instructions:
http://www.androidtablets.net/forum/...m-kernels.html
(Clockwork allows you to make backups - and blocks the OTA updates)
Then you can sideload the update kernal 1.1 using the instructions from the above -- with the image in the following:
http://www.androidtablets.net/forum/...re-rooted.html
This is what I did....When I bought my NookColor --- it had 1.01 - so I autonootered it - then did the above to bring it up to 1.1. The androidtablets forum is a great/friendly place to read up on your rooted NookColor....
Hope that helps!