This isn't a 7" vs 10" screen war, just my 2 cents...
I had a Nook Color & rooted it to use CM7 earlier this year. It ran pretty smooth even when it was overclocked to 1.1ghz (from the stock 800mhz). I loved lots of things about it (being able to view sites w/Adobe Flash, battery life, more portable than a laptop, Android market apps). Keep in mind I'd use it mainly to browse the net, email, YouTube & NetFlix. While I loved almost everything about it (besides the very rare freezes), I just couldn't get past the 7" screen because it was just too small for my liking. That was 95% why I ended up selling it about a month or so after buying.
I purchased my fiancee an iPad 2 so I've used it extensively. Despite the fact it didn't support Adobe Flash (yes, I know they just announced they're no longer supporting mobile Flash), I loved the 9.7" screen size much better than the 7" of the Nook Color. To me, it was a huge difference when browsing the net & watching video clips. The only aspect of the bigger screen that didn't really have an affect on me was checking & typing emails since I still would've typed in portrait mode (on the iPad 2) just like on the Nook Color anyway.
In the end, I bought a Samsung Galaxy Tab 10.1-4G since I prefer the Honeycomb OS vs iOS (including v5.0) but that topic's for another day. So yeah, for you potential buyers of both the Kindle Fire & Nook Tablet, consider the screen size & not just the price. I see it as this...Regardless of what you're paying for a 7" screen tablet pc, if it's still too small for you then are you really going to be happy to the point you think you're getting your moneys worth? I'm not saying a 10" screen is better for everyone, it was just better for me. Food for thought...
BTW, if you guys wanna know how the Kindle Fire feels like in your hands go checkout a Blackberry Playbook since it's the same design casing minus some buttons (volume up/down from what I remember reading).