You do not have to do a factory reset to enjoy Froyo 2.2. If you have problems after you get the update, you can try a factory reset. I did not do a factory reset and I've had no problems. Which is good because I had no desire to setup my entire phone again. If you don't mind wiping, then by all means do a reset, it can't hurt. But you may want to wait and see how it goes after the update. I'm rooted using Froyo 2.2 (Virtuous v2.4 ROM): http://forum.xda-developers.com/showthread.php?t=765447
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