Appearance
Without keyboard Nook is smaller than Kindle, as well as a little bit lighter. Nook is a bit wider and thicker because of wider bezel around the screen and a curved rubber back, and is about an inch shorter than Kindle, but both are comfortable to hold in hand for a long duration. Personally I like Nook's look as it's simple and elegant. But it's nice to have a physical keyboard when you need to type in something.
Screen
Both Nook and Kindle have 6" e-ink screen, with Nook being touch capable. Both screen have good contrast and easy on eyes, but I do think Kindle's screen is a tad sharper when reading.Nook does have better refresh rate and page turning seem faster too.
Navigation
Being a touch interface, Nook wins this hands down. It's simply more nature to just touch and open the book, tab or swipe to turn the pages, or tab on a word to look up it's meaning instead of using the navigation pad with multiple clicks on Kindle. That being said, once you start reading, Kindle works just as well in turning pages using the side buttons.
Storage
Nook has 2GB internal storage whereas Kindle has 4GB. Of the 2GB in Nook 1GB is reserved for Barnes and Noble purchased content, 750MB or so reserved for system, and only about 250MB is user accessible and can store 3rd party content, which to me is really low. Thankfully Nook has a micro-sd slot where you can use micro-sd card to store your own content. Of the 4GB in Kindle you can use about 3.5GB to store anything, but there's no micro-sd slot to add additional storage. To me this is a toss up, but I do prefer Kindle a little bit more since 3.5GB is plenty for eBooks and there's no need for me to get another micro-sd card.
Features
This is where Kindle kills Nook. Both read books and can download/buy books from respective stores. But you can listen to music on Kindle and browse the web using experiential browser (Nook took away the browsing in 1.1 update). Both are not essential to the reading experience, but since Kindle keyboard 3G allows free international roaming and browsing (until Amazon take away), it can come in handle in some situations.
Chinese Compatibility
The website HaoDoo is one of the main reason I decided to purchase eBook reader as the site offers a wealth of high-quality Traditional Chinese e-books in various formats (pdb/updb, prc, epub). To read on Kindle, I can simply download prc files, or if there's no prc files, I use Calibre + pdb plug-in to convert pdb/updb files to mobil format. The files works well on Kindle without any additional setup.
Most of the epub files on HaoDoo does not work on Nook unless you re-convert updb/pdb files to epub files using the latest utility. When you put the Nook compatible epub files onto Nook, Chinese words would show up correctly in the library, but when you go into the book it's all blocks until you check the "Set Publisher Default" option. Unfortunately, this is a global setting, so this change will impact English books where setting publisher default is not necessary and sometimes make the book less readable.
The bottom line is, both readers can handle Chinese e-books from HaoDoo but as of not it's certainly easier on Kindle.
Conclusion
As I said in the beginning, it's not really a fair comparison since Nook Simple Touch and Kindle Keyboard are more of less a generation apart. That being said, I do think Kindle can hold it's own against the newer Nook. Both are excellent readers and it'll really depend on where you purchase your books, but as a pure reader I think Nook wins with touch screen, smaller and more rugged design.
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