Can some one confirm if Google's In-App Billing works on Kindle Fire and Nook devices or do we need to specifically use Amazon's In-App billing for the same?
Google's In-App Billing on Kindle and Nook device
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Google in-app purchase will not work on Kindle device as Google IAP requires Google Play app to be present on the device. For amazon you have to use their own in-app framework. See Amazon In-app
For Nook, I'm not sure, you have to check Nook Developer guide line
Legal issues aside, it depends on the Google Play Store (Android Market) app and associated infrastructure, so Google IAB won't work on any devices that lack those components. This most probably includes the Kindle Fire and Nook.