The NFC transmits information from the secure element. They are both different chips within the phone. If the secure element breaks, NFC will still work, but you will not be able to use Google Wallet on the phone anymore.
The "Secure Element" works closely with the NFC Chip as a security feature. When it is tampered physically or with software (rooting and perhaps changing ROMS), it is set up to destroy itself. When it is destroyed, the only solution is to replace the phone. (Factory Data Reset, unrooted, and revert back to stock will not fix the problem).
Google Tech Support sends a typical email to owners who ends up having this error message:
"We strongly discourage gaining system-level "root" access to your phone if you plan to use Google Wallet. We are unable to support devices with unauthorized operating systems as the security layers of the device may be limited.
If you have other questions, please reply to this email and I'll be happy to help."
I hear it is about 50% hit and miss on rooted phones depending on what owners do with their phones. So, with that said, I would suggest you, as rooted owners stick with the SAME ROM all the way if you want to use Google Wallet. The Secure Element have only 1 life, not "9 lives". You are on your own discretion / risk.
Google will replace the Galaxy Nexus phones for free as long it is stock and not rooted.
Unlocked Galaxy Nexus phones are on sale via Google Play for $399, no contract.
