I just re-rooted mine last night to CM7 with complete success.
The trick to a successful root was using the SGH-I777 specific files:
This link, at cyanogenmod.com works, but it needs to be modified for the AT&T model.
For the recovery, use
SGH-I777_ClockworkMod-Recovery_5.0.2.3
For the CM7 image, use
update-cm-7.1.0-Galaxy2ATT-signed. The first time I ran the image install, it went seemingly too fast so I ran it a second time, immediately after the first and it took longer and looked more, "normal". So, you may need to run the CM7 install twice in a row too.
For example,
Installing the ClockworkMod Recovery, download the
SGH-I777_ClockworkMod-Recovery_5.0.2.3 instead of the 4.0.1.4 as the page recommends. The SGH-I777 specific recovery contains the same "zImage" referenced in the Cyanogen steps, so that is good.
Don't forget the
optional Google Apps too or you might not have all the standard apps.
One more exception, I found in my case, was to copy the new CM7 image zip file to your INTERNAL SDHC memory, not your inserted SDHC card. For some reason, and this might be my card and not simply everyone's, it would not recognize my external SDHC. So, it worked to put the image on the internal and simply guide the recovery to it instead.
Anyway, hope this helps those out there having trouble!