The N1E and N2E support PDF as a format, but really a bad at making PDFs readable. You have to realize that PDFs are intended for reproducing exact print. They are page based formats. When the PDF is created based on typical page sizes (8 1/2 x 11 or A4, for instance), these sizes generally don't fit on a digital screen, especially the smaller eReader screens. To make them fit you'd have to scale the page down, which results in the text being too small to read. So the only other option is to not display the whole page. There lies the problem for small eInk based screens, though you can do better than the NOOK has done.
Kindle does a better job with PDFs. First, they allow you to view the page in landscape mode, which means there's more width available and this usually means you can see the entire width of a page at a decent scale for reading. This means you only have to scroll vertically to see the rest of the page. The NOOK doesn't support landscape viewing. The Kindle also handles panning/zooming better. This makes it possible to read many PDFs, though it's a bit awkward due to the slow refresh of eInk devices.
LCD based devices like the NOOKcolor and the iPad work out much better for PDFs. Panning (scrolling) and zooming on these type of devices work much better. It's still not ideal, because the small screen means you're not seeing the entire page at once and have to pan and zoom around the document, but it's not that bad. For a portable device for reading PDFs, you can't do much better than the NOOKcolor.
When possible, though, it's better to avoid PDFs, as they aren't intended for reading on a small screens. In some cases you can convert a PDF to another format better suited for this. Many PDFs, though, are full of images and diagrams that make it difficult to do this type of conversion.
