Don't on..
1. Flash 2.1 firmware via Flashtool
2. Root via flashtool
3. Install xRecovery via Flashtool
4. Boot into xRecovery and do the following:
-Factory Reset (Full Wipe)
-Wipe Cache Partition
-Advanced options>Wipe Dalvik Cache and Wipe Battery Stats
5. Install ROM.
6. After install done, remove battery, leave for 5 seconds.
7. Put battery back into phone.
8. Don't turn on the phone!
9. Flash kernel and baseband provided by ROM developer via Flashtool.
10. After flashing is done, remove cable and turn on phone.
I've updated this in post 3 of this thread as well

hi, i am on erickwill's rom free kernel. so i still have to start from step 1? or can i proceed to step 3?