A person who was involved in Barnes & Noble's launch of the Nook sends this info about its positioning relative to the Kindle and other potential competitors. This person naturally has a bias in favor of the Nook, but this is interesting as a view onto B&N's thinking.

"Nook advantages
"- More open with ePub, Android OS, and lending
"- My guess is Amazon will copy lending
"- In store WiFi. Users can go in stores and access lots of content from entire books to free publications. Len Riggio, founder and CEO of B&N fought to have comfortable seating in the stores and has prevailed against naysayers thought it would waste valuable space. I think you'll see even more space allotted to this. There's lots of space devoted to music that will be replaced with nook areas.
"- The color touch display really brings the ease of use to ebooks much as Apple did with iPhones.
"- Much larger bookstore that includes Google books
"- Holding. Easier to grip with a contoured and soft touch back. Works equally well for right and left handed."

Again, this comes from an interested party, but it's worth bearing in mind as the product hits the market.