I'm currently auto-nooted, which leaves the default Nook reader software intact. Will installing CM7 also leave the default Nook reader intact?
Nope. You will lose all the default B&N apps.
Aldiko is a very good and free alternative readed that works great with epub files with no DRM on them.
If you have some B&N books that you've bought, you can download the nook app.
The only problem with the nook app is that it doesn't work with magazines like the stock nook reader does.
If that's not a big deal for you then I HIGHLY recommend the CM7 upgrade. I love it.