I have had pandigital e-reader for about 5 years but now I can't download books. When I try to log in it says WiFi connected but unable to connect to BN server, please try again.

To get your books you have to first register your Kindle to your Kindle account. You can do this using a laptop or desktop to log onto your account. Then you can register your device. Or, you can try registering your device in Settings on your device provided you are connected to WiFI or Whisperssynch aka 3G.

While connected to WiFI or Whispersynch then you have to touch *Cloud*, locate the books you want downloaded to your Kindle and touch them. They should start downloading to your device and be downloaded within minutes or less.

It sounds like it cant connect if its rescanning, try rebooting both devices and try again. If that fails try another wifi(another place with wifi) area to test if its the device or the wifi.

Hmm try resetting your modem and router and then trying again.

Could you tell me the name of your tablet?

As I known, nearly all of the tablet can download ebooks only by wifi connected.

For instance, I can read Google books purchased from Google Play Books on Nexus 7. And I can also read Kindle books on my Nexus 7, too.
http://www.epubor.com/read-ebooks-on-nexus-7.html

Step 1Ensure the Wi-Fi and Low Power button located on the top of the device is not in the Off position. This will completely shut off your Wi-Fi adaptor and prevent you from connecting to the network.

Step 2Press the power button on the left side of the device and allow the Pandigital Novel to detect local network connections. If you can't find a local connection, you may be out of range and should move closer to the wireless router until the device detects the network.

Step 3Tap the name of the Wi-Fi network from the provided connection list. If the network has a lock icon next to the name, this means you will need the network security password to log in.

Step 4Enter the security password if prompted, and then tap "Connect."

Step 5Tap the "Next" button to reconnect to the Wi-Fi connection.

Step 6Tap the "Web" button from the main menu if you are attempting to connect to a public hotspot. This will launch the Web browser where you can enter any log in information required to obtain an Internet connection at the hot spot.

Have you tired standing right next to router ?

Please go to the Pandigital website and update the firmware, I will attach a link below.
Thanks for using FixYa
http://www.pandigital.net/Downloads

Try here:
http://www.the-digital-reader.com/2010/07/12/hacking-the-pandigital-novel-video/

Here is a link to the user Guide.
http://www.pandigital.net/userfiles/file/Downloads/UG_R90L200_v1_8_11-12-10.pdf
There are step by step instructions for setting up the wireless.