I own a two year old Nook (pre-Nook Touch) and an Android tablet. My husband has a Nook color. All three are capable of displaying our collection of e-books, but the tablets and the Nook color can do much more.
Personally I prefer my Nook over the other two devices for actual reading. The most important advantage of my Nook is the E-ink. E-ink works beautifully in full sunlight, whereas the backlit screen becomes nearly impossible to see, even if you crank up the brightness. I like to sit in the sun and read, so that's a pretty big deal to me.
Even indoors, I find the E-ink much more comfortable for my eyes. In the dark, you need a clip-on light to read, but I find that far better than having the only light source coming from the screen itself. My husband claims the backlit screen on his Nook color doesn't bother him when reading indoors, so the eyestrain issue is pretty individual. My eyes prefer E-ink, his don't care. It may be because I'm near-sighted. I hold my device very close to my eyes with my glasses off, whereas he is far-sighted, and holds his out at a distance.
The E-ink version of the Nook has a nearly useless browser built in...okay for emergencies, but no fun at all for casual use. Barnes and Noble seems to have figured out how useless it is, as they have hidden the browser in their new Nook Touch (it's there, but you have to know the trick to launch it). The Nook color is essentially a half-broken Android tablet. My husband ended up voiding the warrantee (deliberately) in order to turn it into a full-fledged Android tablet. Not a maneuver for the faint of heart, but he has been very happy with the result. Now he carries it around the house with him. I'm practically a Nook Color widow!
I adore my larger, more pricey Asus Transformer tablet for everything other than reading. When we travel on vacation, I bring both. That might sound clunky, but really, it's not that big of a deal, and absolutely worth it to me. If I had to choose between the two for vacations, I'd take the Nook. If I had no devices at all, and I could only buy one device, I think I'd buy the tablet, but then I would read paper library books until I could scratch up the money for an e-ink device. I truly can't see myself switching to ebooks without e-ink.
All three of our devices are wifi only. There have been times when I've wished for 3G for my tablet, but not so much that it would be worth the monthly fee. No way would a data plan be worth it on an E-ink device. Don't even think about it unless you live in an area where wifi is hard to find. For reading, you only need to be connected when you are between books. Slip into any wifi connected location, download a book in 2 minutes, and then turn the wifi off.
I'm pretty sure I would have been just as happy or happier with an e-ink Kindle. I disapprove of Amazon's decision to create a proprietary format for their ebooks, but I do kind of miss the good advice I used to get from Amazon when I was buying paper books from them. Buying books from B & N is a crap shoot, and I feel guilty when I scout out books at Amazon, and then buy them from B & N, but I do it anyway. No use buying from Amazon when the only place I want to read them is on my Nook.
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