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On my Nook Touch, when you turn the page, it is obvious that they rewrite the text by inverting/overwriting each character with a thicker-stroke character - black then white - you see an instantaneous flash of "hollow" letters, which then disappear before the new page is written.
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You may have a defective unit since this is exactly what I see on my Touch. I also do not see any degradation before a full page refresh. However, I prefer a full page refresh after every page turn because I find the every sixth page refresh too distracting since it is so different.