Why Root Your Android Device
Although iOS users tend to jailbreak their phones so they can get around Apple restrictions on third-party apps installation, the Android mobile OS is a more open system. As with jailbreaking, though, rooting is useful for Android users if their wireless carrier imposes any additional restrictions on using the devices, such as preventing tethering.
There are also some Android-specific reasons to root. Many Android phones, like the Motorola Cliq and the HTC Sense, have custom interfaces which owners may want to get rid of, in favor of using the stock Android OS or a custom ROM instead. Rooting your Android phone can also improve speed and reliability.
Potential Issues with Rooting
Rooting may not always go smoothly, and if there are problems during the process, your device can be seriously damaged. Also, as with jailbreaking an iPhone, while rooting gives you complete control over your Android phone, you may be more vulnerable to malicious apps and stability issues, and potentially be violating your license agreement with your wireless carrier and/or device manufacturer.
In July of 2010, however, the Library of Congress's Copyright Office ruled that jailbreaking your phone is legal, stating that jailbreaking is "innocuous at worst and beneficial at best."
Jailbreaking Apps and Tools
Rooting apps have been pulled by Google from the App Market, but they can still be found on developer sites; Easy Root, for example, is a "one-touch" rooting app for Droid users. As always, unsupported apps are the "use at your own risk" kind.