Redflea,
Thank you for responding... Here is the state of things so far:
Apparently I over reacted because after a couple of reboots I had cell service, GPS etc, which was not the case when I made this post. However, I was unable to boot to either recovery screen (Triangle or Yellow android).
I went back expecting not to be able to issue the commands again, figuring that the nandroid restore of virgin oem would have wipped out root, and that I would not be able to run the commands. To my surprise when I entered terminal and typed su, I still had root privledges. I entered both commands again, crossed fingers and restared the system and attempted entering recovery..... sweating and biting my nails... the yellow triangle finally appeared. So that is good.
So now to the question that puzzels me, my phone still shows the root turtle, and seems to still have superuser permissions, only I am at native 2.01 instead of 2.01 without root privledges. This is not what I expected. Is my understanding of unrooting flawed? Can you help me understand what I am missing I used the steps listed below for unrooting:
How To Unroot by Speeddymon from AllDroid
1. Plug Droid into the computer and mount your sdcard
2. Download
AllDroid.org - Information and unzip it
3. Download
http://www.sholes.info/wp-content/uploads/2010/01/virginoem-backup.zip unzip it to your sdcard in the nandroid folder
4. Copy boot.img and recovery.img from the droidbr.zip file to your sd
5. Unmount
6. Reboot into recovery> backup/restore> Advanced Nandroid Restore> Choose Backup> virginoem-backup> Perform restore
7. Reboot
8. Open terminal or an ADB shell
*terminal app can be find in the Android Market
9. Type in:
su
flash_image recovery /sdcard/recovery.img
flash_image boot /sdcard/boot.img
10. Reboot into recovery and you should see a triangle with ! in the middle
*this means your back at stock
11. Reboot and welcome back