Pete's Motorola Root Tools v1.06 + motorola drivers (on your computer), rom manager (app on phone), liberty 3 v2.0 .zip on root of SD card (just on there, not in a file). Root phone using pete's, its very simple if you get stuck at bootloader unplug the phone from the computer during reboots. Once rooted use rom manager to install latest CWM recovery (helps if you do it multiple times), reboot into recovery, MAKE NANDROID BACKUP, wipe data/dalvik/cache partitions multiple times, flash .zip from SD card.
That's the condensed version. If you are computer savvy at all you should be able to figure out most of the process on your own... using the stickies of course. If you get stuck, we're here.