Keep up with the latest recoveries to avoid problems with flashing newer ROMs!
There are two main recoveries for the DROID. Most of the community has shifted to using ClockWorkMod via ROM Manager while others still use SirPsychoS's good old SPRecovery.
In order to install ClockWorkMod Recovery, go to the Market on your DROID and search for "ROM Manager" (without the quotes), it is made by Koushik Dutta. Install that and open the app up and select "Flash ClockWorkMod Recovery". You must have root to do this.
Step By Step Screenshots
The same can be done with SPRecovery. Open up ROM Manager and scroll down until you see "Flash Alternate Recovery". This will install the latest version of SPRecovery for you.
Pick your poison! ClockWorkMod or SPRecovery!