green on potatoes = poisonous nightshade ?
Yes and no, but for safety sake, yes.
Many plants in the genus Solanum including potatoes and as you mentioned, nightshade can produce solanine which is a potent toxin. A couple mg/kg of body weight is enough to make you really sick. An 8oz green potato could easily have several hundred mg of solanine. You would not necessarily have to eat pounds of affected potatoes to get you sick.
The green color on a potato is an indication, but not a guarantee that the toxin is present. The green under the skin is actually chlorophyll (not toxic) that forms as a result of exposure to light. Light also triggers solanine production as a defense against critters eating uprooted potatoes. Most of the solanine forms in and just under the skin which is why trimming them usually takes care of the problem. Baking or boiling a potato with solanine present will NOT denature the toxin.
It is important to realize that either process can happen without the other - a potato can turn green without solanine being produced and vice versa. A bitter taste in the potato is another, and probably more reliable indicator of the toxin being present. If you taste bitterness in a potato, don't eat it. Personally, I throw out green potatoes period. I keep my spuds in the dark, so it is rarely a problem, and they don't cost so much as to make them worth the risk.