For my two cents, if I couldn't run CM7 or something similar on my Nook Color, I'd have to return/re-sell it entirely. I originally used the stock reader for my magazine subscriptions, but since B&N recently responded "Who knows?" to my question about being able to backup/read the magazines on my local computer, I've canceled those too.
I really only use my CM7 build for reading, but I think that apparently I have different reading needs than most.
1. Highlighting. I have to use Moon+ for highlighting. The highlight slider bars are intuitive to me and super easy to use. Being able to export all my highlights and notes to email, Evernote, iPaper, etc. is also crucial. The B&N stock app doesn't provide export (and, in fact, lost all my notes once when a faulty book crashed the reader - that was a dark day), and the highlighting takes me four or five swipes to snag precisely what I want. I don't like having to fight my reader.
2. Covers. I dunno if they fixed this in 1.2, but I hated how the NC only shows the cover of the book during the swoop-and-load. Moon+ and Aldiko both let you savor the cover as long as you want - and this not only shows off the LCD screen to perfect advantage, it's also useful for books where there are "clues" in the covers. I like studying the symbolism in my covers.
3. Cloud Library. I'm a hobbyist reviewer and I receive a lot of electronic ARCs and books from places other than B&N. I like being able to use Calibre2opds to download my books to my device via the simple Aldiko/Moon+ interfaces. I know you can do that on NC, but the interface is very different, and having everything dump into "My Downloads" is annoying to me.
4. Library Management. Aldiko/Moon+ lets you put your books as shortcuts on your CM7 homescreen. You can fit something like 6x8 (I think that's the CM7 height/width available to widgets?) titles on a single screen. There's definitely a lot more room for titles than on the stock B&N software, PLUS you can organize them perfectly (i.e., lined up neatly) however you want, PLUS you can bring over covers/metadata/etc. from Calibre if the publisher didn't set it properly in the first place.
5. PDF support. OK, I know you can now buy pdf readers in the B&N app store, but you can get equally good ones on the Android market for free. And frankly, I am chuffed at the idea of BUYING a reader to fix the extremely poor B&N stock reader.
6. Button mapping. I like using the volume buttons to turn the pages rather than being confined to using the touch screen. If there's a way to do this on the B&N stock app, I don't know how.
7. Landscape reading. There are definitely epub books where this is desirable and necessary, imho. The B&N stock reader doesn't let you do this except with certain children's books.
8. Public library integration. I was so sad that an Overdrive app wasn't included in the 1.2 app store update. I thought that would be a shoo-in.
I think everyone should do what they personally see as best, and not trying to start a flame war, but I did want to preemptively chime in to say that not everyone who roots or uses CM7 is just after shiny tablet games.