nook hd, how/where do i enter adobe password? trying to download/read library book?

It appears for the standard way you must use it like an eReader for Adobe DRM books;

authorize the Nook via ADE,

download them to ADE then transfer them.

See http://www.dummies.com/how-to/content/how-to-get-adobe-digital-editions-and-overdrive-fo.html

You may be able to download other eReader apps such as Bluefire, Aldiko or Overdrive, which can be authorized directly from within the app.

Quite a few people have had authorization issues with Aldiko and Overdrive.