Yes there are two ways where you can keep the existing stock functionality.
1) Is to use CWM and create a dual boot system where you can boot between Stock nook OS and (Froyo/CM7/HC) your choice.
2) Create a bootable (Foryo/CM7/HC) microSD card and run off of the SD card.
The former option will give you the most stability and speed since the eMMC flash has the best performance, but it is a tad bit more complcated to setup. Here is the link
[ROM] Flashable eMMC dual boot ROMs (Froyo, Honeycomb, Eclair, CM7)
The latter is very easy to do, even easier than rooting the nook, but there is speed performance hit because microSD card are not as fast as eMMC. It is recommended you get a class 6 or class 10 card to improve performance.
Nook Devs NookColor
Booting from CM7 of an SD card is somewhat new, I'll refer you to
XDA Developers (Nook Development)
The last point is I first started with nookie Froyo on the SD card and found I never booted to the Stock OS. However I used a class 2 card and the speed performance was starting to get to me, the apps ran fine, it was just when they needed to read/write to the disk that took forever. Since I never used the stock OS, I decided to install CM7 on the internal memory.
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