I would get the iPod touch since you can do more then just read on it. But I have heard of some apps that you can get were you can get books if you are still having a hard time deciding! It's like a little bit of both! :) Good luck and have fun with your new nook/iPod!
With a nook you could root it and make it an android tablet and put honeycomb on it. Just go to YouTube to do it. But I guess it depends if you want an Android tablet or an Apple iPod touch. So do you want an Apple product or an Android/Barnes and Noble product.