If you are willing to root it, I'd recommend the Kindle Fire HD over the Nexus 7. Rooting is different than flashing a new ROM. Rooting simply unlocks the currently installed version of Android to give you "administrator" privileges. You can still have access to the original Kindle UI but also have it look like a traditional tablet by installing a launcher and Google Play... the two modes (Android and Kindle Fire) can coexist.
From what I've seen, the overall build quality of the KFHD is better than the Nexus 7. And the current price of the KFHD7 is terrific for a device with these specs and quality. For media playback, the KFHD devices still have the best sounding speakers than comparable devices.
I was so impressed with the KFHD7's performance as an Android tablet that I regretted not waiting for the 8.9" model to become available. But that's a story for another thread.
