He can get custom ROMs, but they run with the stock kernel. The only stable ROM right now is Fission, from Angdroid and Team DeFuse. We're being strung along on updates right now (been promised the newest version for D2G for about a month.. I'm not stressed, though), but the previous stable version is still good.
Things you can do to a D2G: Root, overclock, theme, ROM, just like any other android phone. All the info you need is over at droidforums.net, where there is a more active D2G subforum, that's where I get most of my info.
Useful apps: Z4Root for rooting (google it, the APK is available at xdadevelopers, but not in the market)
JRummy's overclock app for OCing (You need the latest version, and you have to check "enable experimental modules" to make it work with the D2G, but it works fine)
SetCPU for setting profiles after using JROC to overclock. Also, if you use SetCPU, set it to turn his CPU down to 300 or 600MHz whenever the screen is off, this will extend battery life a good bit.