The device is WiFi only and comes loaded with 8GB of memory that can be expanded to 32GB. That kind of storage can hold thousands of ebooks plus photos and music. The WiFi only was a great decision to keep the cost down and since so many wifi locations are available these days, 3G isn't always necessary. The only downfall is battery life decreases to 8 hours and is not accessible like in Nook 3G and Nook Wifi. Then again, the battery is also not accessible in the Kindle or iPad.
So why is this a game changer in the world of eBooks? First of all, you have to look at the availability of ebooks themselves for a device. Barnes and Noble provides the largest and most powerful ebook store in the industry. By using a standard format for the ebooks (epub) and a strong relationship with publishers, they are able to offer a huge selection (over 2 million and counting) plus other sources such as Google Books (which is fed right into the B&N ebook store). All of which can be delivered to the device without the need to hook up to a computer using the wifi signal (or the 3G signal in the Nook 3G).
Second, the Nookcolor option fills the gap for readers that has existed between eink displays and emerging tablets while still keeping the price affordable. Currently, consumers wanting the ability to read ebooks and also want multi-function ability are looking at devices like the iPad which starts at $499. Nookcolor provides similar functionality at a much lower price.
Third, the tablet format of Nookcolor also provides new options for certain books that do not work well in the eink display such as children's picture books and newsstand magazines and newspapers. Barnes and Noble is unleashing Nookbooks (B&N's new name for ebooks) for kids which will offer thousands of interactive children's titles. They are also releasing Nooknewsstand which will provide readers with digital versions of newspapers and magazines in full color with a rich reading experience.
If no one has noticed (which it seems many haven't); Amazon has been playing follow-the-leader with B&N over the past year with price drops, a new wifi version of the Kindle, and now a lending feature. Amazon's biggest barrier is its insistence on using their own unique file format for ebooks (Kindle Books) and the blocking of the epub format which keeps their selection at a fraction of what B&N offers. So the release of Nookcolor will definitely be interesting to see what Amazon does. Likewise, B&N also announced that Nooks will now be the exclusive ereader devices sold in Books-a-Million's 229 stores as well as Best Buy and Wal-Mart.
