Ok. I also have a MyTouch 3G Fender, and I have rooted it, and unrooted, then rooted again using 2 methods. First time was the Gold card method, and It's very complicated, and will possibly brick your phone, though you can always recover. The method I just used (so I could overclock because the Froyo update to 2.2.1 kinda slows swype down) is the Super One Click method.
Follow these easy steps:
1. go here
ShortFuse and on the right side you will see Super one click. Click on that and find the downloads.
2. Download the one with the driver pack installed in it.
3. Copy these files to any directory. (I put them with my Android-SDK files)
4. Turn on USB Debugging in Settings>Applications>Development also while you're in that menu check the Unknowns Sources too.
5. Plug your phone into your computer, and wait for it to detect the USB debugging
5. Run SuperOneClick.exe and click Root
6. When it's done just reboot your phone and PRESTO! Rooted phone with stock 2.2.1 Froyo!
I usually download and run Root Check from the android market to make sure the phone is actually rooted.
Super One Click says that it installs busybox, but Root Check says it's not installed. You'll have to installing that on your own. Hope this was helpful.