I've just done this. First android root ever...went very smoothly. I've had one complete shutdown in 3 days, but that was due to battery levels.. Still learning Android. Followed XDA and Youtube video for rooting and installing CM7. Haven't had a problem since.
I've experienced no problems with video, movies, flash, or tethering. Only 2 apps not working (Speed Channel and Trapster). Seems much faster than stock. Surfs MUCH quicker than phone (Palm Pre) when tethered. Occasionally have to reset Wifi (ie: turn off then on again) I'd recommend.
Cheers;
CH