The Droid did rotate when it was first launched, but there was some sort of update sent out to our phones that changed this.
Where are you getting this information from? Without a source this is not credible information...
Any updates pushed out by Verizon OR Google must be approved by the end user. They cannot just push stuff to your phone without your knowledge. Until I find proof that the home screen did rotate when someone received the phone I am going to stick to my argument that stock Android (1.1, 1.5, 1.6, 2.0) builds DO NOT have the functionality to allow the home screen to rotate using the STOCK launcher. Once I see proof of this occurring in the stock Launcher then I will believe it, but I have gone through 2 Android phones and been with the dev community a while and the home screen has never auto-rotated based on orientation.