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After playing with both, there are a few areas that favor one device or the other.
Kobo's strengths lie in the simplicity. The home screen is simply a display of the last 5 books you've opened or added to the device. Easy enough. Having a short list that you can use to build a reading list that is easy to get to is another plus. When it comes to larger collections this simplicity starts falling behind the Nook where you have search, customizable shelves, and even the ability to navigate the filesystem to find the book you want. The Nook's homescreen is a joke, unfortunately.
The industrial design is a bit better than the Nook's in my opinion, being a bit thinner, and the more standard shape actually makes it a bit easier to grip in ways the designer didn't intend. The nook's hard buttons are useful for keeping the screen clear though, and the extra width isn't something I'd call a deal-breaker in any way, shape, or form.
Where the Kobo falls way behind is treating side-loaded content like second-class citizens. Can't highlight side-loaded content, and the rendering engine is different between the two. Side-loaded content still displays page number markings in the right margin (Kobo epubs don't), and currently has bugs with displaying italics/bold (Kobo epubs display them fine). The Kobo also uses the header and footer to display the chapter title and book title, but doesn't display this information for side-loaded epubs. This might be just as well, since they actually slow the reading experience switching between chapters, and causing a double black-flash. Also, Kobo epubs only show the page numbers for the chapter, not the whole book, and I don't see a way to switch.
The nook on the other hand has gotten to the point where as long as you put content in the right folders (which Calibre does for you), side-loaded content is the same as purchased content. Highlighting, notes (which the Kobo can't do yet), and dictionary lookup all work the same in every book. And the rendering bugs in the nook have less impact on the formatting of the book (The nook doesn't understand 'sans-serif' as a value for the font-family CSS property). The nook also doesn't delve more than 1 level deep in the TOC which is a problem in some books.
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