***Edit** I used win32diskimager and it worked!!
Alright admitted noob to this.. I've read and reread the directions and have a .img file of the 2gb_clockwork-188.8.131.52 file. I have the winimage and winrar loaded. I reformatted my 2gb sandisk mircosd card to fat32. I can copy stuff to and from the msd card. When I try to use Winimage to restore virtual image to physical drive it doesn't see my sd card or anything else as an option. I did check the box to use removable drives. I've tried extracting the uImage and uramdisk files to the msd card and boot it off the nook but the msd card does seem to be bootable. I'm pretty sure it's the restore image process that I'm missing..
BTW thanks for all the effort and time you've taken documenting everything.
Oh another stupid question.. Do you have to root the NC before you repartition and load the CM7? I figured if i didn't want anything to do with the old BN image then I could just nuke and pave.. I want to use the internal memory and then add a msd card to addition space afterwards. Thanks again