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AFAIK rooting will void your warranty.
Putting CM7 on the devices main memory would too, but putting it on an SD leaves the actual device untouched and once you remove the card it's a stock Nook COlor again.
Kindle books are the wrong format and DRM scheme to work on a Nook of any kind. To use a Kindle book on a Nook you'd have to remove the DRM and convert it to ePub. It's against forum rules to discuss DRM removal techniques, but Googling 'Apprentice Alf' can help you there.
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