First, decide between tablet and e-reader. E-readers do books, and they do them very well. If you mostly want to read, get an e-reader. If you want other things, get a tablet.
As for Kindle vs Nook - there are some good comparison videos on Youtube. The new Nook touch is very similar to the Kindle. My mom has the Nook and she loves tapping a word to have a definition pop up. Nook is also better for anyone with impaired eyesight, as the user interface is easier to read. It also allows book lending from libraries and other Nook users. It has an SD card slot to expand the memory. It has no audio capability.
I have the Kindle, and it's really great too. It has the advantage of 3G connectivity (if you pay for that feature - and I recommend everyone who buys a Kindle to do that) which means you're (almost) always able to log on and have limited web access or download books. It also has the ability to play audiobooks or even to use a computer voice to read your books aloud to you.
Honestly, the two are similar enough that you won't really go wrong with either. There are a few differences which might sway you one way or the other, but they're both good devices. As long as what you mostly want to do is read.