Step by step if you want to get to the newest Gingerbread:
1. Download z4root (
here), Droid 2 Bootstrap (
here), the 3 parts of the .588 install (
here), and .595 (
here I recommend deodexed, because people have been having major bootloop problems with the odexed one) and put them all onto your SD card.
2. Backup your files and whatnot from your current build however you usually do. I did a TiBU of all of my user apps+data as well as my user dictionary. Also did a backup of my call log using "call log backup and restore"
3. get to .340 stock via SBF (instructions
here)
(3.5) Once you get to stock and boot for the first time, you can skip reauthenticating your phone by just touching all four corners of the screen with the android on it when you boot up in clockwise order, starting with the upper left. This is optional, just saves a few minutes fiddling with settings.
4. Install z4root and root with it.
5. install droid 2 bootstrap. Bootstrap recovery, reboot into recovery, wipe data/cache, and install all 3 parts of .588, sequentially. You must install all 3 before you leave recovery. Wipe data/cache again here. (Yes, you're wiping it a lot when there shouldn't be anything on there, but its the easiest way to avoid bootloops)
6. Install .595 (You don't need to leave recovery from the previous step)
7. At this point I'd reboot (first boot may take up to 10 minutes), reinstall droid 2 bootstrap, and do a quick backup of the clean GB install. then i'd start restoring everything I backed up from step I.
Note: You will need to SBF back to .340 before you could take the OTA. OTA won't be rootable for a while though, so I'd stick with .595 for now.
PS. if you follow these instructions, you can't really screw it up. Even if you somehow flash files in the wrong order or something, you will only be an SBF from fixing it. The only circumstances in which you could break your phone is if your battery dies mid-flash. So
have a full (or almost full) battery before you start.