First, what was reported here in the Kindle Fire/Nook Tablet face-off blog article on November 9, a week ago (and denied by a B&N customer rep to a comment-area questioner here who then ordered a Nook Tablet based on that) was based on a B&N website comparison page. It wasn't rumor-based. B&N restricts NON-B&N content to a 1-gig area of its 16-gig internal storage area. It's similar to the new structure of the Nook Color effective May 2011. See foonotes 5 and 6 at B&N.
And now a mainstream news site has picked up that fact.
Engadget's Brian Heater posted an article this morning with the headline, "Nook Tablet limits internal storage for non-B&N purchased content to 1GB" and opens the article with, "Well, this is definitely a bummer.
He notes that B&N has been "talking up all of the Nook Tablet's internal advantages over the Kindle Fire" and writes that this "particular spec may not be quite as good as it looks on paper." He keeps in mind that the Nook has a microSD card slot for an additional 16 gigs of memory. From what I've seen, though, some non-B&N/non-Amazon apps expect to be installed in internal memory.
Sideloading of non-device-manager-approved apps
Amazon's Kindle Fire allows side-loading, though, by the checking of a box in Settings that allows the installation of non-Amazon-approved apps from unknown sources -- and that's allowed for internal memory. B&N has been said NOT to allow sideloading of non-BN-approved apps.
Sideloading other-sourced apps, when allowed, vs rooting
The ability to sideload other-sourced, non-Amazon app files, as PC World's Ian Paul points out, is that you can install non-offered (by Amazon) apps such as B&N's Nook app on Kindle Fire or even Android tools such as the Swype keyboard.
I won't go into details of rooting the Kindle Fire, since it requires only a one-click rooting tool (SuperOneClick 2.2, linked by PCWorld) and the PC World article gives full details, but it requires a few other things be done and a larger need to do there is just not there with the Kindle Fire if all you want from rooting is the ability to install non-Amazon-approved apps. That's already allowed.
Others will want their own custom-interface, but with the ease of use that Amazon has programmed, few mainstream users (Amazon's target audience) will be wanting that. My recommendation is just to go with the approved sideloading (a decision unexpected of Amazon), using caution about where you get your APK files).
Amazon's decision displays a more "open" system and state of mind than B&N's although the latter actually proclaimed in their tablet launch that they were more open than Amazon in that they allowed apps like Netflix and Hulu Plus. I found it really odd that they didn't merely monitor what the 'opposition' was publicly doing (Amazon announced partnering with Netflix, Pandora, et al, during the launch of Kindle Fire on September 28) before announcing Amazon would not allow access to 3rd party streaming apps.
A key factor is that B&N relies on partners to stream media and Amazon does have its own media-streaming of it. Amazon is just not restricting customers to its own material.
Netflix's Android app upgrade
Netflix upgraded its app for Android this week and will do one for the iPad next, and what has startled watchers yesterday was that they put the Android tablet audience before the iPad audience for such a big app upgrade. My NookColor, I confirmed, is not eligible for the Netflix upgrade, but the NookTablet and KindleFire are.
Amazon releases source code for Kindle Fire (as required by use of Android OS)
PC World's Ian Paul reports also that Amazon recently released the source code for Kindle Fire and you can download that at Amazon. I don't know how much is included in that, but the source code listed for its older Linux-based e-readers included mainly libraries and other unmodified code. With devices built on Android, there's probably more, but I don't know.
According to a news.ycombinator.com discussion on this, Maakuth replies, "I think, because most of Android source code is licensed under Apache license, so they don't need to publish their modifications."
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