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As far as I can tell, the Nook Touch integrates the covers within the epub, but doesn't use the extra thumbnail .jpgs that calibre sends.
The My Files section it has it's own generic icon for epub files (image of a book that says Book on it). The image file for the cover is then listed next to it as its own file, but the Nook can't open it, and it's icon is just a ? on a blank page. (That's the icon view, the list view just lists all the files.)
When the epub files are opened to read, the first page is the cover within the epub (as far as I can tell). This works for files that I deleted the accompanying .jpg from the memory card, so I'm assuming the extra thumbnails aren't necessary.
I opened one .epub that had a cover image within the file structure and the nook couldn't read the book, so I'll load another one on to test.
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