The battle for supremacy in entry-level tablets keeps getting more and more interesting.

When Barnes & Noble (NYSE: BKS) introduced its $249 Nook Tablet earlier this week, the superstore chain tried to play up the reasons why gadget seekers would be willing to pay $50 more for its device than for Amazon.com's (Nasdaq: AMZN) Kindle Fire.

The Nook Tablet features double the RAM and initial storage capacity of the Kindle Fire. It also comes preloaded with streaming apps for Netflix (Nasdaq: NFLX), Hulu Plus, and Pandora (NYSE: P).

Did we really think that Amazon was going to let B&N have all of the fun? The leading online retailer revealed this morning that the Kindle Fire won't be restricted to Amazon's own massive ecosystem of digital media. Making the most of its Android roots, Amazon's tablet will also have access to thousands of vetted Android games and apps.

If the 18 million movies, TV shows, music tracks, books, and magazines available digitally from Amazon aren't enough, the Amazon Appstore is there for countless third-party diversions.

This morning's announcement singles out dozens of apps and developers that are on board. Social-gaming leaders Zynga and Electronic Arts (Nasdaq: ERTS) are there. Beyond Netflix and Pandora, official apps for Facebook, Twitter, and LinkedIn (NYSE: LNKD) are available.

The consensus all along has been that the Kindle Fire and now the Nook Tablet won't be a threat to Apple's (Nasdaq: AAPL) iPad. But is that still true now that most of the more popular applications available on the $499 iPad 2 are now just as available on touchscreen tablets that are slightly smaller but cost less than half as much?

Amazon and B&N will open up the market to new tablet users who weren't comfortable springing $500 or more for a portable leisure gadget. However, as third-party developers take over both iOS and Android devices, will price now become the driving factor?

This will be an interesting holiday season indeed.

If you want to follow this saga, track the latest news by adding Barnes & Noble and Amazon.com to My Watchlist.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.