I used these simple steps to root my Motorola Droid.

First, you have to install the USB drivers (i.e. pdanet).  Then, you can connect your phone via USB cable. Make sure USB Debugging is turned On.

Next, you can download and run SuperOneClick. Click Root.

Reboot phone when complete.

Go to the Android Marketplace and install Wireless Tether application.

Connect your computer to the AndroidTether network and you should be good to go.

[If it doesn’t work, here are some optional steps below]

– After connecting your Turn USB Debugging OFF

– Click Root

– When it says: Waiting for Device, Turn USB Debugging ON

It’ll now run RATC

When it says: Starting ADB Server…
– Turn USB Debugging OFF
– Turn USB Debugging ON
– Turn USB Debugging OFF
All BEFORE it says “Waiting for device…” again