build.prop is basically an initialization file for your phone. It contains info such as the carrier name, whether to enable JIT and stagefright (which are already in android 2.2, so no need for a link to them, simply enable them), and a few other things. You can basically package it up in a zip and flash it to your phone just like a custom rom (in fact, most custom roms include a modified build.prop).
The kernel is basically the core part of android. All the other pieces are built on top of it. So it being fast is important, and a few other people have made custom kernels that are smaller and faster than the stock one. Most roms also include a custom kernel as well. In fact, a rom is just a collection of all the pieces necessary to create a full OS (kernel, build.prop, theme, apps, drivers, etc) and with android just about any piece can be swapped in and out without harming other pieces (within reason).
Here's a link to a faster kernel that works with the stock rom:
http://forum.androidcentral.com/lg-optimus-s-rooting-roms-hacks/46789-oc-kernel-xionia-kernel-2-6-32-26-a.html
put the entire zip on the root of your SD, boot into recovery and flash the zip.
Here's a link to a tweaked build.prop that enables JIT and stagefright in the stock VM rom. I'm pretty sure it will work, but it's not tested (other than on my phone), so use this at your own risk.
http://dl.dropbox.com/u/19912863/stockjitsg.zip
Same story as the kernel. Put the zip in the root of the SD, flash from recovery.
There are enough people working on roms here that someone will probably have a "total package" solution within a few days, but this stuff will give a pretty big boost just with the stock rom.
EDIT: IceMank brings up a good point. You will need to use the buttonmapper to fix the home and menu keys on the phone. They are reversed with the xionia kernel.