Once you roll back to 2.0.1 and root, you then install a version of 2.1 that has root access*. You end up with the 2.1 upgrade (with its new widgets, live wallpapers, etc) and root access, which allows you to install Barnacle or the other wifi-tether.apk. It's actually quite easy to do, as is going back to the stock non-rooted 2.1, if one wished to do so.
*I'm not suggesting that 2.1 has been rooted (because it hasn't, from what I know) but for the purposes of being able to install apps that require root access, this works like a champ.
I got the update for my Droid (so I'm now running 2.1), and I really want to tether it to my iPad. I've read instructions on downgrading back to 2.0.1, but they made me pretty nervous, especially since I'm on a Mac and I'm pretty sure I'd mess something up and end up screwing up my Droid. Any help would be greatly appreciated.
Works great for me....wifi at work has been HORRIBLE (like 400-500kbps) so I started tethering to my droid when speeds get unbearable. I've been averaging about 1.5Mbps using my droid....which is fast enough to do any web surfing and even watch netflix, ABC and Air Video!