What you probably saw was a person installing an
unofficial 2.1 ROM, which requires that you first root your phone (gain root level access) and is
potentially detrimental to your phone in a number of ways:
1) You could 'brick' your phone (meaning screw the OS on there and render the phone useless, aka a paperweight and nothing more). Now, the chances of this happening are small, but not entirely nil, so it is something to consider when reading up on rooting.
2) You could fry the hardware if you do not know what you are doing and install, say, an OCd (overclocked) kernel that runs the phone too hot - although it seems to have thermal protection built into it, the CPU of the phone itself is rated at something ungodly like 100 deg C, which, in my understanding, is not good at all for surrounding components on the circuit board, the capacitive display, the battery....
3) It is
technically a voiding of your warranty.
Now, with all that said, there are literally thousands of users here that have rooted and installed an early release of the upcoming 2.1 update, so the dangers are
minimal however, before some user jumps in here trying to say there are no dangers, let me assure you - the dangers exist, however minuscule.
On the off chance that you are
still interested in this, head over to the All Things root subforum here to see what the buzz is all about.
All Things Root (Droid) - Android Forums
