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Love my nook and have no regrets but had these choices been available at the time that I'd made my decision, I would have gone with the Kindle 3. The nook has very poor battery life - I have to charge it every other day. Hearing about the 1 month battery life of the Kindle makes my jaw drop. Also, annotation is poorly implemented on the Nook. For $139 you get a better screen on the Kindle 3.
The only thing that would make me hesitant with the Kindle is the lack of epub support. Now if Nook came out with the Nook2, I think I would go with Nook2 over Kindle3, if the Nook will have improved battery life. But Kindle 3 vs Nook, I would go with the Kindle3 and convert my epubs to mobi through Calibre.
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