Droid Rooted, here's my take.

Before you root, you should probably upgrade to 2.01, as that will ‘break’ your new root access. You can get that download from here, if you have not already received it OTA (Over the Air). You need to follow the directions below, to apply the 2.01. The directions for each download it exactly the same, except for the ADB access.

This ‘root’ is strictly for developers. It’s not going to give you any ability to do anything to your phone yet, unless you really know your *nix commands well enough not to screw something up on your phone. So continue only if you really want this ability (the ability to really screw up your phone).

You can follow the direct postings here.
I’ve downloaded the file (best link is here). You should also download this file, as it will be needed.

md5sum of the boot partition:
3e49d99b320cf5c20bedf09343c1155c /dev/mtd/mtd2

Here is the how-to that embeem posted, I will add to it where I see fit, just to help some of those out as to what is going on.

Download the zip file

You can find the link at the top of this post.

Rename to “update.zip” and copy to the sdcard
It is currently named droid-root.zip, update.zip is required as that will be used internally by the script in the program.

Power off the DROID and power back on while holding the X key
When you see a “/!” symbol, press both vol+ and camera
This isn’t magic, it’s simply a rescue mode. Slide the keyboard out to start. It’s very easy to figure out what is going on here. You have to press and hold the volume Up key then press the camera button.

Use the onscreen menu to install update.zip
You must use your d-pad to do this. just choose update.zip from the menu.

Once installed you will be able to run “su” from your adb shell.

This one is the kicker, best explained by syntrix

you have to attach your droid in debug mode in eclipse and use adb from the sdk. Again, I’m holding off on this, it’s my only phone.

But once you get this access, you can run commands natively, and copy files to the sd and pull them off the droid.
ADB is only ran from the SDK developers tools. In other words, you are running command from your computer, not the phone.

Now, to take this a step further, we can also get a terminal emulator running on the phone with root access according to mjxg’s post…

1) download this: http://www.magicandroidapps.com/su.zip
2) push it to your phone

C:Android>adb push su /data/local
595 KB/s (76200 bytes in 0.125s)

3) C:Android>adb shell
$ su

mount -o remount,rw -t yaffs2 /dev/block/mtdblock3 /system

cd /system/bin

mv su osu

cat /data/local/su > su

chmod 6755 su

4) verify

ls -l *su

-rwsr-sr-x root root 76200 2008-08-01 05:00 osu
-rwsr-sr-x root root 76200 2009-05-30 11:28 su

5) finish



6) open up a terminal emulator on the phone and run su and enjoy

With all this said, this is a remarkable, easy root access. It literally is just adding a file (‘su’) that the user has permissions to. ‘SU’ means, switch user, and by default, that user is root. Giving the user access to this file, means they can run that command, and if that file has the right permissions, which is does in the update, it will run ‘as’ root. And tada, you can now begin to get access to the rest of the system!

Developers will now take over.