Originally Posted by Jarek

When it is complete, your phone will power up again. Go to Settings->Applications->Development and check the USB Debugging checkbox.

Connect your Droid to the Computer again.

Click Start on your computer, and click run. Type cmd in the box, and hit ok. Now type the following, pressing Enter after each line:

cd c:\Android\tools

adb push su /data/local

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

ls -l *su
(you should see the following)
-rwsr-sr-x root root 76200 2008-08-01 05:00 osu
-rwsr-sr-x root root 76200 2009-05-30 11:28 su
(now continue typing these following lines to finish)

sync

reboot

You're done!