From nookDevs

The old patched (recompiled) versions of wpa_supplicant at https://nookdevs.com/NookColor_adhoc_wifi_access worked flawlessly on NC 1.0, 1.1, Honeycomb preview, etc., but it does not work, apparently, on NC 1.2.

That version was taken from a wpa_supplicant IBSS patch found via a Google search, http://szym.net/android/ and was compiled against TI's Omapedia Eclair sources ( http://omappedia.org ) - although that was a different framework than the B&N stock build, it worked. See http://szym.net/2010/12/adhoc-wifi-in-android/.

On further reading on other xda forums, e.g., the HTC Hero, G Touch forum at http://forum.xda-developers.com/showthread.php?t=754961, that have dealt with the same issue, and found a solution. It appears that NC Android 1.2 uses a newer Android v0.6.x wpa_supplicant and thus the fixed ad hoc wpa_supplicant must be recompiled with new developer libraries -- whereas 1.0, 1.1, the Honeycomb preview, etc. are built from 1.1 or older developer developer libraries.

If someone can do this, the problem should be solved.