Thank god, Froyo is available..
I've disabled the Lagfix.. And now updating my phone to froyo.. Do I have to uninstall the root too?
Edit -
Finally updated the firmware to Froyo 2.2. Pretty smooth.. I haven't lost any of my data even after update. That is good thing.
Edit 2 -
The phone just crashed.. I tried holding menu key for long time.. Tried the Sleep key too.. didn't worked any of it. The last option, I removed the battery and inserted again. Phone took long time to start (almost more than 1 minute)
The phone is somehow stable now but didn't tested rebooting it again. Will have to check it once again. Did anyone experienced this?