I'd definitely go with a kindle. I did a few generations of nooks, but they have consistent issues and incompatibility and lag behind the kindle in utility. Also, unless there's been a lot of change recently, BN seems pretty focused on making it difficult to use other sources of books, while the kindle is pretty easy to sideload (took just a few easy steps to install the nook app on my fire, negating any need for conversion).
Hard drive size shouldn't be a major consideration. Paperwhites and e-inks aren't what you'll use for video or images, and books are tiny. Unless you plan to use the thing as your primary music player, don't stress on this.
e-ink trades visibility during the day for visibility at night, as there's no backlighting. Not a deal breaker but something to consider. Picking up a used one on Craigslist for $20 is a great way to have a simple, portable reader, though (I got one for travel and camping so I don't risk anything nice).
IMHO if you want long battery life, the paperwhite is the way to go. If you want lots of versatility (and the apps to go with it) choose a fire.