EDIT: There is now a much easier way to do this. Check out SalsichaNooter.
With lots of tweaking and testing, and tips from random users at XDA, here's how I got my nook rooted and working with the new firmware. I ran into a glitch with NookTouchTools (more on that below) so I've now done it twice. Seemed to work better (?) the second time. If anyone has an account over there and wants to link or cross-post my experiences, that is fine by me. This is probably not for those of you wanting an easy fix, but if you like to tinker like I do, here's my success story:
First Try:
1) Used
nookRestore to restore
/system.
2) Wiped
/data with Settings --> Device Info --> Erase and Deregister Device.
3) Reregistered nook with B&N and my GMail address.
4) Copied B&N 1.1 update to nook and ran it.
5) Imaged
TouchNooter 1.6.24 to my SD card.
6) Replaced the SD
/nooter/root/uRamdisk with the
rooted 1.1 USB uRamdisk.
7) Replaced the SD
/nooter/system/framework/framework.jar with the
hacked 1.1 framework.jar.
8) Booted TouchNooter. Didn't work (gave it five minutes). Tried again. Didn't work. Third try? Worked!
9) Android Icon, Registration, Enable Location Services, etc. No problems. If you've rooted before with TouchNooter you know the drill.
10) Tried YouTube registration. 401 error. Tried Gmail sync. Nothing.
11) Rebooted and retried GMail. Worked! Market works!
12) Tried updated Vending.apk for search capabilities. Didn't work.

13) Used Browser and goo.gl to download SearchMarket (
http://goo.gl/SyqY6) Yay, search!

14) Installed ADB Wireless Widget.

Ready to rock and roll.
15) Tried to install
NookTouchTools jars. Yikes! Infinite reboot, won't start.
Second Go:
1) Used
nookRestore to restore
/system but did not wipe
/data.
2) Reregistered and reupdated to 1.1.
3) Remade TouchNooter SD card and booted. Worked first try.
4) nook seemed frozen at home screen chooser (GO Launcher vs. nook Home). Rebooted and all is well. Search Market and ADB Wireless remained installed and working.
5) Waiting on NookTouchTools this time.
I'm disappointed that NookTouchTools isn't working yet, so I'm stuck with ButtonSavior. But I'm confident that it will be working eventually.
If I find anything is not working as expected, I'll post it here.
EDIT: I went to post on XDA but got skeered away by their "You are a noob" video.
EDIT2: See post #7 for how I did it and got a working Market w/ search. The order of steps are as exact as I could be.