Root/Un-root

What is Root, and Why Root?

The good thing about having root is you can go back if you want. The same is not true of not having root. We do not know what steps Google/Tmobile will take to rid the end users of root in the future. For all we know the next OTA will remove the keys that allows the RC29 downgrade method to work and you could be stuck on a non rooted G1 forever. If you have root and for some reason it does not work for you there is always the option of going back.
What Does Root Give Me?

1.Full control over your system
2.Ability to alter system files. You can replace many parts of the "Android Core" with this including:
-Themes
-Core apps (maps, calendar, clock etc)
-Recovery image
-Bootloader
-Toolbox (linux binary that lets you execute simple linux commands like "ls") can be replaced with Busybox (slightly better option)
-Boot images
-Add linux binaries 
3.Run special apps that need more control over the system
-SuperUser (lets you approve or deny the use of root access to any program)
-Task Manager For Root (Lets you kill apps that you otherwise could not kill)
-Tether apps (like the one found at [android-wifi-tether.googlecode.com])
4.Backup your system
-You can make a folder on your sdcard and backup all of your .apk files to your sdcard (helps if an author decides to "upgrade" you to a version that requires you to pay to use the version you just had) 
5.Relocate your (browser/maps/market) cache to your /sdcard
6.Relocate your installed applications to your /sdcard
7.Reboot your phone from the terminal app easily (su <enter> reboot <enter>) 
What Do I Lose Having Root

-The ability to accept OTA updates (well, you can but you would lose root, so its been made so they get denied)
-The sense that someone else controls your phone
-The need to sit in an Android chat channel asking how to get root
-The need for a stupid useless "File Manager" that lets you see filenames but almost nothing else.
-The ability to have a knowledgeable conversation with a T-Mobile rep about your phone. (Ask one of them to spell root for you)


Link for root
Link for un-root

Here is a short tutorial(how to root) to save your time

1. Download the zip files to your SD Card (not in any folder).

2. Switch off your phone.

3. Boot into recovery mode(Press Vol Up + Power Key + Home button together at the same time to boot in recovery mode).

4. Touch screen is disabled in recovery. Use Volume keys(UP/DOWN) for scrolling and home button to select the highlighted option.

5. Select Apply update for sdcard

6. Select update.zip (which you have downloaded).

7. Wait for it to show complete and then select reboot system.

Credits: Ronnieryan and narasimhan