The Kindle Fire and Nook Tablet have always been fierce competitors, but the Fire's $50 discount compared to the Nook has so far given it quite an edge in sales. Sensibly, Barnes & Noble wants to get in on that profit, and as a result have released an 8GB version of their Nook Tablet costing the same $199 as the Kindle Fire.
All that you lose by going with the cheaper version of the Nook is 8GB of storage and 512MB of RAM, which for most daily tasks should not cause a problem. The Kindle gets away with only 8GB of space because most media is stored in Amazon's cloud, but even though B&N's cloud ecosystem is much smaller than Amazon's, storage shouldn't be much of a problem on the Nook Tablet either. In fact, all you will really have to store on the Nook is books, since other media can be streamed via services like Hulu, Pandora, and Netflix. As far as the RAM goes, the Kindle Fire only has 512MB to begin with, so the drop just makes them even more equal competitors.
Along with the Nook Tablet, Barnes & Noble has also dropped the price of the original Nook Color to $169. Despite its age, the Color has gotten plenty of updates from both unofficial developers and B&N, so it is still a fairly useful and relevant device.
I doubt that Barnes & Noble will be topping the Fire's impressive sales anytime soon, but these price drops will certainly help the Nook compete. Not only that, the cheaper price will obviously be better for consumers, and I love to see competition bringing down the price of 7-inch tablets.[MSN Gadgetbox]