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Just checking off the obvious factors:
1) Did you buy this from B&N?
If so, return it. Sounds like something is wrong.
If you didn't get it from BN, you might be out of luck. Depending on if it was a used item, it might be a blacklisted device.
2) Do you really need the update? I haven't used a nook in quite some time but I seem to remember you could use them without registering them? Just had to sideload everything.
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