Is there perhaps a screen protector on it? If misapplied, those can cause issues. The NOOK Tablet is also sensitive to grease on the screen. A good wipe with a microfiber cloth, including around the bezel edges, might help. Other than that, you may have purchased a dud. Is it running B&N firmware, or custom? A firmware reload might help.
I just purchased a used Nook Tablet with a fresh factory wipe. I tired to log in with my nook account but found that the screen wasn't responding properly to my touches. Often, the button would have to be pressed many times before the screen recognized the hit. sleeping and unsleeping the device seemed to help. When typing my WiFi password the numbers i hit on the key pad often doubled or characters on the complete other end of the board would register. Otherwise, it wouldnt respond to my touches again.
Once I labored and got the nook to register, I tried to deregister and reboot which did not solve the issue.
I also registered again and tired to search for an app. The typing screen at this point had a mind of it's own and would continually hit the space bar on its own.
When looking for device info, the tablet would back out on its own as well.
Using both the charger and the battery, the problem persisted.
Is this a software issue? Can I manually wipe the OS from my PC and install fresh or something?
Has anyone ever seen this issue?
It reminds me of a bad mouse touch pad that sends a mouse all over the screen.
This does not sound like software. If the device is still under warranty, I'd take it back for a replacement.