1) I would try a factory reset. Hold down the power button for up to 1 minute and allow the screen to go completely black. Do not press "power off" when the prompt occurs. After the device is powered completely off, hold down the navigation button ("n" at the bottom of the screen) and power it back on while holding the navigation button. This should prompt a factory reset. MAKE SURE YOU KNOW YOUR E-MAIL AND PASSWORD before doing this, as you will need them to register the device and download your library again.
2) Should a factory reset not work, call 1-800-THE-BOOK. Explain this problem to them. I would explain that you have done a soft reset and a factory reset with no luck. Your device may need to be replaced.
I hope this helps!
My Tablet did the same thing. After fighting this for over 2 weeks, and still unable to download my previously purchased books/apps without the device rebooting and going back to a previous configuration, I called today and they are replacing my Tablet. I also tried to load the new 1.4.2 software update and it would not install. When I tried to deregister & erasemy Tablet, it wouldn't work. A factory reset also would not work. The Help Desk folks are going to have to manually erase it for me. Hopefully the new Tablet will not have the same issues.
I would recommend trying a soft reset first (prior to full factory reset.) Soft reset by:
"1. Press and hold the power botton for 20 seconds, then release the power button.
2. Press the power button again for 2 seconds to turn on your NOOK."
Then see if all apps downloaded. (or redownload as needed.) Then be sure to sync your library. (Fact that apps are needing to be reinstalled, seems like it is doing some kind of reset on you.) If that doesn't work, THEN try a factory reset. (Make sure any sideloaded content is backed up first though.)
Thanks for the fast and detailed suggestions. I had tried the soft reset to no avail. I was not aware of the proceedure to do a factory reset as adag97 suggests above, so I brought the Nook back to the local store, where they decided to replace it. So I am a satisfied customer, but I am curious to know if the factory reset would have worked, just for the sake of saving my other configurations and not having B&N waste a Nook (although, kudos to them for not making me jump through a lot of hoops or unnecesssary delays).
Erase and deregister restores to factory settings. I think just restoring to factory settings will make you reinstall all your apps and other configurations as well. Is that what you wanted to know?