I don't know if I did it the right way, however I followed verygreen's steps as close as possible and I was easily able to install gapps as well. I'm on a Windows 7 machine, so maybe my steps were a bit different:
1) Burned the installer image to my uSD using Win32 Disk Imager
2) Downloaded CM nightly build (most current at the time was #26)
3) Copied this zip file directly to the burned image. (Like verygreen said there's only one partition)
4) Put the uSD card in my Nook and booted up.
5) Let verygreen's program work it's magic.
6) My Nook booted back up to my Stock Rooted, so I rebooted my Nook.
7) Booted right up to CM7!
8) To install gapps, I plugged my Nook into my usb port and followed the instructions for the HC from this link:
9) Once it rebooted, Market and everything works BEAUTIFULLY!