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Search around the forums and you will find pleanty of info on both these questions. I will answer in breif:
1. When will Droid get 2.2 - I have no idea. The droid is on 2.1 right now and will be getting the 2.2 'froyo' operating system. I have not kept up on this because I rooted my phone and have been on froyo for weeks. The 2.2 OS is what lets you have Flash installed, it works pretty well, fun for watching tv shows.
2. What is rooting - Rooting is like hacking. When you root your phone you are able to change just about anything on your phone such as its operating system, more options, and themes. It is awesome.
Just hold your horses. The update to 2.2 is starting this week. You don't need to do anything other than follow the prompts to update on your phone when they appear.
Here's a simplified version; once you root, go to my froyo rom page in my sig and install any 2.2 rom, download and install the flash player .apk file and install that with a file manager like astro or root explorer.