@ disconnected: Yes, shelving on the NOOK has always been a pain. At least you have plenty of memory for your B&N content!
(By the way, if the idea is to store your purchases in the cloud, why does the device have to have all that memory partitioned off?
)
One extreme solution would be to delete the books you don't want to re-read from your B&N account. Cull the herd a bit.