For my birthday, my daughter gifted me with a lovely Nook Color (and then showed me how to use it, lol) My sister-in-law had been bragging on her Kindle so much, saying I needed to try a reader also. She dropped hers on a very hard floor, on the corner of the reader and it shattered. She is sporting a new one now, this time in a protective cover.
I priced covers for my Nook at Best Buy ($39.99!), and on Amazon ($25.00 or so). That seemed outrageous, so I made one that I really like a lot : ) First, I chose a book cover I really liked. My mother read to me from books just like this one, and it is just the right size.
For the padding, I used a brand new lunch bag, a give away from somewhere, that is made of closed cell foam.
I laid it out to see how it would go together. The loop side of the velcro goes on this piece before it is glued into the book. Measure it around your reader, so you get just the right length to keep the reader held securely, and at a depth that is close to the original thickness of the book. For mine, that was 2 1/2 inches plus extra length to sew it onto the back of the lunchbox fabric.