Below is what I have done on my phone. There are number of different ways to do all of this and a number of different ROMs and updates you can apply. You just have to search for them. Hope this helps.
1) Root Your phone:
First and foremost this forum has a great tutorial stuck to the top written by ccapasso. After you have read the FAQs of that post I suggest you skip the "
Manually rooting your phone:" section and go straight down to the "
One-Click/Auto root your phone:" section and start from there. Do all 8 steps in that section including doing a nandroid backup as described in step 8. Here's the post:
http://androidforums.com/sprint-htc-hero/38911-guide-root-rom-faq-tutorial.html
Should take you 5-10 minutes. Make sure USB debugging is on and make sure when you run the diagnostic check you get all green check marks before you root.
2) Install New Rom:
You can use whatever ROM you want. I suggest Fresh 1.1 for newbies. It's simple and keeps all your current data and apps on your phone. Read this first:
Why flash ROM to Fresh 1.1
Then download the actual ROM from
here to your PC.
Follow the "
Installing Fresh 1.1" directions from the link I posted in Step 1 (
here it is again). Again, ccapasso has done a great job giving step by step instructions. ccapasso doesn't explain this but note that you can also reboot into recovery by using the pre-kitchen (tools and tweaks-->reboot/shutdown-->recovery) which makes life easier.
3) Update Kernel:
I recommend creating a nandroid backup before doing this.
The new custom ROM will improve performance on your phone. Now to improve performance further you can tweak your Kernel. Note that some ROMs like modaco already have a highly tweaked kernel so you may not see as big of a performance boost there compared to if you are using a ROM like fresh 1.1. Just like you installed the ROM you will do the same for the Kernel. Place the Kernel update file on your SD Card, reboot your phone into recover (RA) mode, and install the .zip update.
I used the less aggressive Gumbo Kernel update on my phone given that the more aggressive was a bit much for me. you can find that .zip file
here.
For the regular Gumbo Kernel update you can download that one
here.
4) Install setCPU for CPU performance enhancement:
Not necessary but I recommend this. Search the marketplace for this app. Cost is $.99. Once installed, make sure you select the hero as your phone. Settings are up to you but I would suggest leaving it set to "performance".
5) Enjoy a faster phone.