I followed all your instructions and the video (Guide to rooting 2.1 droid on a Motorola droid). Everything was the same except nothing happened when pressing allow update.zip installation. (I think that part was right) Then I hit /sdcard/update.zip (deprecated)
Then it says
Install from sdcard
Finding update package
Verifying update package
E: Can't open /sdcard/update.zip
(bad)
Installation aborted
I added the update.zip by dropping into sdcard from the mac
Yes I wiped data and cache
Help me LOL
Go into Astro(or what file manager you use) and see what the file is named. Make sure it is not "update.zip.zip"