Software used:

• psneuter
  source code here: https://sites.google.com/site/root4android/rooting/psneuter-c
  compiled binary can be found inside SuperOneClick
  direct download link: psneuter
• su
  source code here: https://github.com/ChainsDD/su-binary
  compiled binary can be found inside SuperOneClick: search for su-v2
  direct download link: su-v2
• Superuser
  source code here: https://github.com/ChainsDD/Superuser
  compiled binary can be found in the Android market page
  direct download link: Superuser_2.3.6.1.apk

Once you have all the necessary stuff, we can start!

Step by step guide

1. Start putting device in “debug mode”: Settings – Applications – Development – USB debugging
   

   

   
2. Connect device to pc using usb cable and start adb with
   adb shell
   You may to choose “Charge phone”, so you can still access your sdcard within the phone.
3. Check you can write in this specific directory:
   $ cd /sqlite_stmt_journals
$ touch testfile
$ ls -l
-rw-rw-rw- shell    shell           0 2011-08-02 16:23 testfile
$ rm testfile
$ ls -l
$ exit
4. If everything went ok, put the needed files in the previous directory; from your pc terminal type:
   $ adb push psneuter /sqlite_stmt_journals
3157 KB/s (585731 bytes in 0.181s)
$ adb push su-v2 /sqlite_stmt_journals/su
630 KB/s (26264 bytes in 0.040s)
$ adb push Superuser_2.3.6.1.apk /sqlite_stmt_journals
3533 KB/s (196521 bytes in 0.054s)
5. Prepare the software on the phone:
   $ adb shell
$ cd /sqlite_stmt_journals
$ ls -l
-rw-rw-rw- shell    shell      196521 2011-08-03 13:16 Superuser_2.3.6.1.apk
-rw-rw-rw- shell    shell       26264 2011-08-03 13:16 su
-rw-rw-rw- shell    shell      585731 2011-08-03 13:15 psneuter
$ chmod 755 psneuter
6. Now you can exec psneuter. You will lose the active shell.
   You could see this message or not, that’s not a problem:$ ./psneuter
property service neutered.
killing adbd. (should restart in a second or two)
   Your phone will detach and reattach usb connection automatically.
7. Once more you have to connect to the device with adb shell, but you’ll see a different prompt:$ adb shell
# id
uid=0(root) gid=0(root)
8. Now we have a temporary access to root user via adb.
   Let’s do the trick on the system:
   # mount -o remount,rw /dev/block/mtdblock0 /system
# mkdir /system/xbin
# chmod 755 /system/xbin
# cat /sqlite_stmt_journals/su > /system/xbin/su
# chmod 6755 /system/xbin/su
# ls -l /system/xbin/su
-rwsr-sr-x root root 26264 2011-08-02 18:19 su
# cat /sqlite_stmt_journals/Superuser_2.3.6.1.apk > /system/app/Superuser_2.3.6.1.apk
# chmod 777 /system/app/Superuser_2.3.6.1.apk
9. It’s time to reboot:
   # reboot

That’s it.

Verify

One easy way to verify the process is to install “Android Terminal Emulator” from market and type:
$ su
#

if you get the Superuser popup and the right prompt “#” it’s all ok.

Further reading

Why don’t you install ClockworkMod Recovery now?

Maybe Ice Cream Sandwich?