What's involved in manually updating my Nexus One? If I wanted to manually update my Nexus One, say to Gingerbread, what's involved in the process?

I'm familiar with this question, Manually Updating your OS?, but unsure if the answer applies to the Nexus One. Do I need to root my phone in order to update it?
There currently is no official update for the N1 to Gingerbread yet.

However, you could root your phone and install CyanogenMod 7 (nightly, it hasn't hit release candidate yet) to get Gingerbread on your phone.  From what I've heard, the nightlies have been pretty stable for the N1.

More details on the CM wiki here.

Basic steps include:


Root your phone
Install ROM Manager
Flash ClockWork Recovery
MAKE A NANDROID BACKUP OF YOUR PHONE
Flash CM7 


Note: rooting your phone will void your warranty.  For more info about rooting, see here and here.