Phone updates
A few people mentioned this so I thought I would mention this as it might help those of you with "root anxiety"
If you get going with custom ROMs for your phone, the authors will normally incorporate any updates that have been publicly released into their own ROM's. So say you are on Bugless Beast or Cyanogen, they will (fairly) regularly release updates that you can either either flash on top of, or after a backup, a fresh image onto your phone which incorporates those updates from Google. In fact, I've had my Droid 1 for about a year now and all of the updates that I have installed have been through the flashing of custom ROMs, not via the system update function of android itself. I guess I just wanted to help clarify that issue to take the fear out of the process to some extent.
If you are on a phone that does not have a custom ROM, the other advantage to rooting is that you can perform a complete backup of your phone which can later be restored. This is helpful if you play around and delete items or flash themes or overclock so that you can restore back to a known-good working phone image.
Someone mentioned Titanium Backup, and for thoroughness I thought I would also mention Root Explorer, which, although is a paid app, is very helpful for removing bloat directly from the system/app directory. I usually just rename them to xyz.old and reboot so that I don't lose track of what I have disabled.
Not sure if this is news to anyone, but felt it should be mentioned.
BTW, this app is great...I spent several days going through the root process, so this should prevent quite a few headaches...thanks for bringing this to our attention.