You are on the froyo kernel. If you want to be on the latest and greatest, you'll have to sbf. Once back on stock, you can go to about phone in settings and dl the ota gb (.601). From there, you can root this new ota with the d3 one click root method (thru your pc), then install cm7 (from revs unofficial nightly page on rootzwiki, whose builds are based on the ota gb kernel)
CM7GB-601
CM7GB-601