Kindle or Nook?

Nook hands down.

Nook reads ePub format. This is an open standard format and can be read on nearly everything. There are many hundreds of thousands more books in ePub than AWZ(amazon's proprietary format). (as you mentioned your public library may even support eBooks)

Nook can be bought at Barnes and Noble and Best buy now. Amazon is still the only place for the Kindle.

Nook runs Android as you've mentioned.

Nook can download 'free' books in B&N stores as well as coupons for free goodies at their 'cafe' locations inside of B&N stores.

Nook can read PDF format NATIVELY. Last I checked the Kindle required you to 'email' the PDF to your Amazon account in which the servers would process it (for a fee) and allow you to read it on your Kindle.