Paul from Modaco has released the full guide on steps to root HTC Desire. Unsurprisingly, the rooting tutorial guide comes with several caveats with the most important one being that rooting will completely wipe your phone off and that there is no way at present to backup your device ROM. You can follow the complete tutorial here
Here is a gist of how to go about it
Step 1 : Backup your microSD card and turn it to a goldcard (A GoldCard is a special SD card which, when inserted into your device, allows you to flash RUU files with a different CID to your own device.)
Step 2 : Download a copy of ‘rooted update‘ and copy it on to your SD card
Step 3 : Turn off your HTC Desire and turn it back on by pressing the back button down. The screen will now display ‘FASTBOOT‘
Step 4 : Download ‘Test Ruu‘ to your computer. Connect your phone to your PC and run the file. Wait for it to complete the upgrade
Step 5 : The phone will now be turned off. Unplug it and press the volume button down to power it back on. You will see ‘HBOOT‘ displayed on the screen. Use the volume and power buttons to navigate through the options and select ‘RECOVERY‘.
Step 6 : The phone will display a Red triangle. At this point, plug your phone to a Mac OS X or Linux computer
Step 7 : Download ‘Push Files‘ and extract them to a folder on the computer. Run the ‘recovery-linux.sh‘ or ‘recovery-mac.sh‘ file as is appropriate
Step 8 : Use the optical trackball to navigate through ‘Wipe -> Wipe data /factory reset‘ then ‘Flash zip from sdcard‘. Select the rooted update and confirm.
Step 9 : The update will begin. Once the flash is complete, reboot the phone and your are done.