Can you root a phone that has 2.2 on it...? Or did you need to do it when it was 2.1?
Yes, but at the moment there's a trick to it if you want to install a custom recovery image. The fix is in the works.
About tethering:
(Taken from my 2.2 update install guide that is no longer to be posted.)
WHERE’S MY TETHERING! I WAS TOLD FROYO WOULD LET ME WIFI TETHER MY LAPTOP/COMPUTER/PSP/XBOX/TOOTHBRUSH/BLENDER/TOASTER!
Uhm.... Toothbrush? Okay, no. Not so sure about the blender either, but the toaster...
Symbian-based toaster announced! | Symbian Blog
Anyway, no. You were told wrong or heard old news. Tethering is supported by FroYo but isn’t mandatory. This update gives you official USB tethering at a cost of (reportedly) $15 a month on top of your data access plan. Wireless/WiFi tethering is not and never will be enabled unless you a) root, or b) Verizon changes its mind. I’m thinking b just ain’t gonna happen, folks, so don’t get your hopes up. However, there are alternatives for USB tethering:
Easy Tether ($11 to buy the full version after a 2-week trial period, last I knew), PDA Net ($30 after a 2-week trial period, last I knew), and Proxoid is free. There are some caveats, though: They all require small programs installed to and running on your PC/laptop/Macintosh as well as custom drivers, but these are all provided by the deveveloper for download and install. Under Vista the driver install for your phone is often slow and painful, and doesn’t always take the first time, but hang in there and it will complete. PDANet supports Bluetooth Dialup Networking if you want to use it wirelessly and know how. Proxoid requires the knowledge and ability to set up proxies inside your internet applications. I tested Proxoid and it works, but it’s a pain in the butt, especially if you need to change the proxies from time to time to make sure it’s still working. I didn’t use PDA Net for anything but USB (and only once at that) because of the ridiculous price and I didn’t have any way to access Bluetooth on my desktop. Easy Tether was my choice because it was cheaper (I was originally planning on bying it) and worked great for the month I used it before I rooted because I needed WiFi tethering and I knew Verizon wasn’t going to put it on the phone..