I echo the ClockworkMod. Your friend should have flashed it through Rom Manager for you. If you have the paid version of Rom Manager, you can check out the ROMS in the Download Rom portion of it, and have it do the installing for you in ClockworkMod. If you just have the free version, you'll have to put the ROM zip on your SD card, boot into ClockworkMod and select the zip on your own. Make sure to backup your current ROM and then wipe data/cache when you try a new ROM.
I also really recommend Titanium Backup to backup user apps so you don't have to redownload them every time you change a ROM. The free version should be enough for you.
I really would suggest CM 7.1.1 or Thundershed's CM7, or some other AOSP Gingerbread ROM. I know from experience that CM 7.1.1 and Thundershed's CM7 have tethering built into them and you don't have to download an extra app.