Technical questions about the Nook Color rooting process
I recommend reading up the NookDevs wiki, and specifically the section about rooting.  It's a very straight-forward process that is completely reversible.

To answer your questions:


If the rooting process fails, you can always boot from the SD Card and start over.
There is an official B&amp;N 1.1 stock image floating around that can be used to bring your Nook Color back to its original state at any time.
You can run a custom ROM entirely off the SD Card.  The NC will run a bit slower (depends on the speed of the SD Card), but you will be able to retain the original firmware.  Just remove the card and it will boot normally.  You can install a custom ROM onto the internal memory, overwriting the stock image.  The Nook will run faster this way.  There are also ways to re-map the internal partitions and set up dual-boot, so that you could run both original firmware and a custom ROM from internal memory.  A prompt during power-up will allow you to select which ROM to boot into.