From nookDevs

How do I do a hard reset (system restore)?

Note: This could[1] remove all your content and should be a last resort when your nook will not work properly. Use this reset procedure at your own risk.

There are a lot of "ideas" on how to do this. I think these are the two reliable ways:

Method #1. Use this if you haven't rooted your nook.

• Press Settings on the touch pad, then Device, then "Unregister your Nook"
• Below that press "reset to factory settings" & Confirm
• It should reboot and be restored to the latest firmware you had installed.

Method #2. Use this to go back to the firmware the nook was shipped with (use this if rooted)

This will actually restore it to the same exact way you got it from the store. It's the equivalent of restoring your computer with your installations disks.

• Turn off your nook completely.
  • If you are at the "home" screen then hold power button for 3 seconds and choose "Power off" when prompted.
  • If you are in the screen-saver mode then hold power button for 10 seconds until screen will freeze or go blanc, or text "Your nook is switched off" will appear.
• With it off, hold the power button until the screen flickers black for a moment THEN CONTINUE to hold it for another 15 seconds. You won't see anything happen at this point - but the animated arrows will stop typically.
• Repeat the above step 6 times in a row. YES, Six is the magic number that tells the nook to do a restore. At the six time screen will get half white- half black and it's a good sign!
• Now press the Power Button once to turn on the nook.
• The touch screen will go black with a description of what it's doing (restoring). This may take several minutes - do NOT stop it.

Method #3. Note that this absolutely destroys your shelves, notes, and other information, and you will be asked to register your Nook with BN again.

• Turn off your N2E completely.
• Turn it on again by holding down power, and then,

as soon as the screen flashes, begin holding down the bottom page turn keys on the left and right of the device until the screen flashes with a message asking if you want to do a factory reset.

• Click the home key twice, and you should be on your way.

To update to the latest software version, press the "My Library" button. While in the "My B&N Library" area tap "Check for new B&N content". It will get the new firmware and start updating the latest software. Again, this will take a while like above steps.

1. ↑ Although it didn't delete my side loaded epubs when i restored from 1.1.0 firmware to 1.0.0, but it would be a good idea to back up your content before restoring.