I'm having the same problem. What do we do? This came after I downloaded veersion 2.0 of Nook software.
My local library gave me the solution: Apparently sometimes the Adobe authorization on the Nook disappears, so you have to reauthorize it. The steps depend on your version of Adobe Digital Editions (I think mine is probably an older version as I've used this device for several years). Try contacting your local library and/or possibly Barnes & Noble support for specifics. I had to do the reauthorization through my computer, which basically involved deleting two files from my Nook, disconnecting the Nook, opening Adobe Digital Editions, reconnecting the Nook, which then prompted me to authorize the device. It worked! Then I transferred the library books back into my Nook from my Adobe Digital Editions. Good luck!
Thanks very much! It was sweet of you to respond!