Rooting will not give you new colors.
By doing the SBF you will simply go back to what you had before the update, so Froyo.
It will not be rooted, and everything will be as it was when you first got it. For the most part. The SD card will still have your data, but you would need to have the market update all your apps.
I'm pretty sure you can get your apps back by simply loading up the market and going to "my apps".
Your contacts will need to either be backed up using verizon backup manager or by using google to store your contacts (that's what I do)
But I don't know how to backup any other settings, if at all possible.
So basically you would be starting from scratch.
Your other option would be installing CM7, but the cm7 thread is a little hard to browse through and I do not know exactly where the right files/instructions are at this moment.