I've only had one kid's game that triggers the "not enough space" message when it tries to update - a game that's never been played BTW and that isn't a large file to begin with. Not to mention that there is 3GB free space left on my internal drive on the HD, so it's got to be some quirk with that particular program.
I've got the 16GB Nook HD and it will hold a lot of apps. The only problem with the Nooks is that they label their internal hard drive "sdcard" so you can't really load apps to an external SD card, which labels itself "ext_sdcard" unless the app itself gives you a choice of where to install/download to and recognizes the "ext_sdcard" designation. The HD does allow you to set the default download location for videos/movies to the external SD card, though. (But if you buy a movie from Google Play and download it, it goes onto the main drive not the external SD card.) You can sideload movies onto the external card, of course.
My rule of thumb has always been to buy the device with the most memory I could afford right from the start, because I never know what I will be putting on it in the future. And given that programmers are no longer constrained by limited HD sizes to write programs lean and mean, more space is better, IMO.
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