For anyone interested,
- Connect your Phone to your computer, do not disconnect it during the installation.
- Download the Froyo 2.2 Update
- Rename the file to update.zip.
- Note that if you’re using Windows and don’t have “show file extentsions” turned on in the file explorer you won’t see a .zip. Just rename it to “update” (no quotes, of course) because it’s already a zipped file.
- Copy the update.zip file onto your microSD card.
- With your Nexus One off, hold down the trackball and press the power button.
- You’ll be booted into a white screen with three Android robots on skateboards. Select “Bootloader.”
- On the next screen, select “Recovery.”
- Your phone will reboot, giving you a picture of the Android robot and an exclamation point inside a triangle.
- Now press the power button and volume up button at the same time. It could take a couple of tries.
- Now (using the trackball this time) choose “Apply sdcard:update.zip” and let things run their course.
- This can take up to 10minutes so be patient and DO NOT try to turn your phone off
- Your phone will take very long to reboot (5-6min) This only happens the first time, so be patient.
Source: Parts of the howto taken from xda-developers.com