The subject line says it all - a lot of people new to rooting decide to install KaosFroyo (or Kaos Gingerbread) for some reason, and it is not something that somebody who is new to the process should be doing.
If you want faster stock, with more space for installing apps, try xtrSENSE instead. [ROM][GPL][3/15/2011] xtrSENSE5.0.1 [cache2cache,apps2sd,oc,jit]-HTC Sense - xda-developers
If you want stock without the Sense launcher, try xtrROM instead. [ROM][GPL] xtrROM5.0.1 odex,cache2cache,apps2sd,jit,lwp,oc[3/29/2011] - xda-developers
If you want Froyo, skip that and go straight to Gingerbread instead. I recommend CondemnedSoul's CM7 ROM, since it is a simple one-file flash that includes the Google apps. [ROM] 9/18/11 Condemned CM7 V18.3 (2.3.5) - xda-developers
If you simply must have Froyo, try CELB Froyo, but note that it requires a second flash of Google apps for Froyo: [ROM][GPL] CELB Froyo 4.4(Plain CM Rom)3-22-11 - xda-developers