I hear there are a couple versions out for Droid OS.
I currently have an Eris, with factory OS - 1.5 I believe. Am I able to upgrade? If so, how?
Here is the instructions for the non-root upgrade version:
Here is the instructions for rooting then upgrading your phone:
root eris 1.5 to 2.1 rooted
Credit to the OP, I was just trying to simplify it.
To root your phone means to have complete control over everything. You can load custom roms that have live wallpapers and do things that other Eris owners can't. Eventually you could even overclock your processor to speed your phone up (that isn't available yet). So to make a long answer short, yes it's basically hacking your phone. It does void any warranty though, something to consider.