Installing CM7 is sort of like installing an operating system. When it boots up, there will be CM7 logo then a "desktop" with icons like a Windows or Mac computer.
I installed CM7 weekend before last after messing up my Nook trying to edit the build.prop file in hopes of not getting an update and messing up my autonooter. It's awesome! I use Firefox, TweetDeck...even Netflix if you're willing to muck around in the files. If you use an SD card, try to get the Sandisk class 4 cards. I used a Kingston first because that's what I already had and CM7 ran slow as molasses. I found the Sandisk 16 GB card at Radio Shack and now it's zippy!
Since the Nook app works with CM7, I guess I could really just install on the internal memory...will have to wait for another block of free time for that!
Good luck! Good instructions are
here and
here. There are also YouTube videos that walk you through the process.