Rooting allows you to have full control over the phone
It allows you to flash/install many different versions of 2.1 or 2.2 roms,kernels,themes etc
A list of some of the options is here Nexus One Android Development - xda-developers
I would suggest you read thru this forum and Nexus One - xda-developers
So you understand what modifying your phone is all about and what it takes to accomplish the task
Modifying your phone in any way also comes with risks if not done right