Recently we upgraded our Verizon Motorola Droid to the Android 2.2 Froyo OS (upgrade available). Froyo is almost entirely a win. It runs everything much faster, and includes plenty of upgrades all around although some apps are not yet fully debugged for the new OS. However, in their infinite inanity, Verizon locked down the Droid's tethering ability with the new OS, and any attempts lead one to a page for a new plan upgrade they can purchase to enable previously free tethering. This is a brilliant way to alienate loyal customers. Fortunately, there is an app for that. EasyRoot safely roots the Droid phones for $1. Rooting, is giving the user and with user permission other applications, superuser complete control over their Linux phone. Once rooted, many other free applications allow users to take full advantage of their phone's potential including effective use of the terminal, phone-wide ad-blocking, and fixing USB tethering, and turning the phone into a wifi hotspot. EasyRoot has been blocked from the Android Market owing to Verizon's cozy relationship with Google, however it is still available for manual install. EasyRoot even has unroot capability in case you have to take your phone in for service.
*Update* - We also managed to root the Droid 2 using the following procedures: link.