Thanks to the huge discount on Nook Simple Touch earlier this month in UK, hopefully the device will regain some popularity and draw more attention from the XDA community. Unfortunately all the new devices come with firmware v1.2.0 while most posts in the forum were for the outdated v1.1.x, including the brilliant multitouch mod from wheilitjohnny. I know there is a way to downgrade to v1.1.x but I still prefer v1.2.1 after I tried v1.1.0. So I decided to port wheilitjohnny's mod to v1.2.1. After one week's hard work as I'm a newbie to the Linux world, I finally built the kernel and saw no more boot loop. All the multitouch test tools from Market correctly reported up to 2 fingers.
Before put the kernel to your device, make sure it's already running 1.2.1 firmware and rooted. You can find the link to the official upgrade file in the forum and you can use Nook Manager to root your device which is also available in the forum.
Then please found the kernel attached as zip file. You need to unzip the file and follow arkusuma's post on how to install it.
All credits go to wheilitjohnny. It's all his work.
One lesson I learned for all the developers who may be interested in more mod development is, to make a bootable kernel you MUST use toolchain from "http://www.codesourcery.com/sgpp/lite/arm/portal/release1293". Select the IA32 GNU/Linux TAR one (MD5: c6930d14801b4fab6705d72df013e58b). Any other toolchains including Google's own or even another version from codesourcery won't work. The generated kernel built with any other toolchains will only cause boot loop.
[UPDATE] Oh forgot to say, you need to add one more line to your /etc/permissions/required_hardware.xml on your device. You should be able to find the first line already in the file, just add the second line.
<feature name="android.hardware.touchscreen" />
<feature name="android.hardware.touchscreen.multitouch" />
More info please check http://forum.xda-developers.com/show....php?t=1563645