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This is a known problem and solutions are available.
All of these solutions are actually doing one thing: that is to modify the build.prop file.
If you are running CM7 off emmc, you can download the nooknetflixfixer apk from here:
Nook Netflix Fixer - xda-developers
If you are running CM7 off microSD, then you can either use the mod from Chisleu:
[CM7 MOD]Chisleu's CM7 Mod (6/10 for n98) - xda-developers
or use the mod from Projektdotnet:
[CM7 MOD]Projekt Mod aka Chipmunk Fix - xda-developers
Good luck.
Please wait.
Now assuming that you have modified the file correctly, and have double checked that the file has been modified, then what you need is a GOOD Netflix client, because even Netflix clients are not born equal (at least to nook color).
Please check if you are using this Netflix client:
com.netflix.mediaclient-2.apk