Instructions to root Nook Touch on
http://www.youtube.com/watch?v=eFZVpCSRpeI (root kit taken from xda-developers) work.
In addition, you need to remap some page turn button to BACK button, otherwise it's hard to use android OS (you need to change files /system/usr/keylayout/TWL4030_Keypad.kl and /system/usr/keylayout/omap_twl4030keypad.kl using adb from the android SDK for that). Also this BACK button won't get you out of B&N reader. So it's better to use some good android reader app and forget about B&N apps altogether.
Also you need to remap HOME (N button) from the B&N menu to android home screen. I didn't figure out how to do that one yet.
After rooting Nook Touch gets much more functional, and the popular reader app Aldiko is better than the one that came with B&N firmware.