How to Hack Your Android Phone (and Why You Should Bother)

For understanding Rooting and why... Please Refer this...
Some things you should know about rooting....

For Rooting your Android Device... Please Refer this...
Want to Root Your Android Phone? 
Why Hack Android?
For those with older handsets, rooting the device lets you install customized ROMs which can deliver major speed improvements and performance increases. For example, the popular CyanogenMod.
Another good reason to root your phone? Multi-touch.

How to Root Your Android Phone 
Before getting started, remember to back up your phone, including your contacts, SMS messages, files and photos.

1. The first step is to download and install Superboot, a boot image that, when flashed, will root the device the first time you boot up. You can get a copy of the Superboot zip file from the

http://android.modaco.com/topic/298782-08mar-superboot-erd79-gri40-rooting-the-nexus-one/ 

2. Once downloaded, extract the files it contains to a directory on your computer, just like any other zip file.

3. Now put your Android phone in bootloader mode.

http://android.modaco.com/topic/299078-how-to-unlock-the-bootloader-on-your-nexus-one/

To do so, turn off the phone, remove the battery, and plug in the USB cable. When the battery icon appears onscreen, pop the battery back in. Now tap the Power button while holding down the Camera key.
For those whose Android phones have a trackball, you have an even easier method of doing this: Turn off the phone, press and hold the trackball, then turn the phone back on

4. Depending on your computer's OS, do one of the following:

Windows: Double click "install-superboot-windows.bat"
Mac: Open a terminal window to the directory containing the files, and type "chmod +x install-superboot-mac.sh" followed by "./install-superboot-mac.sh"
Linux: Open a terminal window to the directory containing the files, and type "chmod +x install-superboot-linux.sh" followed by "./install-superboot-linux.sh"

5. That's it, your device has been rooted!

Now What?

Now that you've rooted your Android phone, you can get busy adding features, functionality and other hacks.

1. Multi-Touch

http://gizmodo.com/5439137/multitouch-browser-comes-to-droid-by-way-of-software-hack

http://www.redmondpie.com/multitouch-in-nexus-one-browser-9140377/

2. Mods for Performance Improvements (and More)

http://www.simplehelp.net/2009/10/04/how-to-install-cyanogenmod-4-1-99-on-your-g1-android-phone/

http://wiki.cyanogenmod.com/index.php/Main_Page

3. Extra Apps and Features

For more fun hacks, try these:

Anyone with a rooted handset can set up Wi-Fi and Bluetooth tethering using

android-wifi-tether
http://code.google.com/p/android-wifi-tether/