Ok so I just did this with my droid, and it worked flawlessly. I wanted to share it with you guys so that maybe some of the less experienced people could get ROMs up and running with ease.
NOTE: I only tried this with Pete's Bugless Beast ROM.
Here we go!
1.Root your droid. This site is so easy, and will take you no time at all. Obtaining Root | Root Your Droid
2. Once you have the Droid rooted, go to the Marketplace and download Droid Root Helper.
3. Open DRH and click the menu key on your Droid.
4. Click Get the Tools.
5. A window will open with simple instructions on how to extract the tools to the ROOT of your phone.
6. Follow those instructions and once the tools folder is placed in ROOT, open DRH again and click Mountblock3. (allow)
7. Once mounted, click install busybox.
8. Click install Flash_Image.
9. Now click Rename Recovery-from-Boot.P
10. Scroll all the way to the bottom of DRH and click Flash 99.1b Recovery.
11. Click unmount.
12. Click Sync.
13. At this point you will have 0.99.1b Recovery, you want to have 0.99.2b. So click this link to download 0.99.2b http://downloads.sholes.info/recovery-0.99.2b.img
14. Once downloaded plug your Droid into your computer and mount it.
15. Copy the 99.2b Recovery file to the ROOT of your sd card. Unmount your droid.
16. Go to the marketplace and download Terminal Emulator.
17. Open Terminal Emulator and type
"su" press enter and allow
"flash_image recovery /sdcard/recovery-0.99.2b.img"
18. Now you will be in the recovery menu. Create a backup by navigating to BACKUP/RESTORE then select ADVANCED NANDROID BACKUP and check boot,cache,data,misc,recovery,system then select PERFORM BACKUP. Now you have a backup incase something goes wrong.
19. Reboot your Droid and plug it into your computer. Mount it.
20. Transfer the update.zip file to the ROOT of your sd card. (Bugless Beast update.zip can be found here AllDroid - View topic - [ROM] Bugless Beast [950MHz & Wifi] V0.7.2 (2/1/10) )
21. Open DRH and click Reboot Recovery.
22. You are now in Recovery. Navigate to install then select Allow update.zip installation then Install /sdcard/update.zip (deprecated).
23. Reboot your droid and congrats! You now have Bugless Beast on your droid! (reboot will take longer than normal)
To overclock download Set CPU. Open Set Cpu and scroll to the bottom then click autodetect frequencies then slide to the desired frequency then click apply. (Don't slide Min setting) I highly suggest that you use profiles to save battery life.
You can donate if you would like. To: Mammoth101011@gmail.com via paypal
Special thanks to Sam for his contributions to everyone in this thread!
Thanks for looking and sorry if this guide is not great, it's my first one ever. Just thought i could help some people in the same boat as me.