Anyone who's attempted to or successfully installed an unofficial ROM, would love to hear your experiences in terms of difficultly of install and stability. Please include what carrier you're on.
As to the quality of the ROMs themselves, it (of course) varies. I've never had anything that was just outright unusable (except maybe the stock ROM -- it was ungodly slow). The first few ROMs I used crashed about once or twice a week, which was annoying, but typically happened while I wasn't using the phone, so I just felt it vibrate in my pocket. Now that I've switched to Cyanogen though, this problem has completely disappeared, and the phone is very quick, especially compared to the stock image. Seriously, if anyone else has a HTC Hero, I'd recommend rooting and moving to the Cyanogen mod ROM, it's like having a completely different phone. Plus, I get to be on 2.2, while the stock ROM is still on 2.1
The only downside of it so far is that I couldn't manage to get my carrier voicemail working with the image. There may be a workaround for this, I just haven't looked. Since Google Voice integrates so well with the handset, you can tell your phone to forward all of your voice mail to VG, but not use it for any thing else (or choose when to use it for calls, etc., it's amazingly flexible).
I use the xda-developers forum for all of my rooting and ROM needs, and you can probably browse some of the feedback and FAQs there if you have any questions. Alternatively, my e-mail is in my profile if you have any questions you can't seem to find answers to.
Rooted and never looked back. I went for a Sense-ified 2.1 build. Finally went AOSP to get to 2.2 and it feels like a new phone. It is so much smoother without the lag on user actions that I was seeing before (most notably going to/from phone/dialer/answering use). I'll probably never buy another phone that is not rootable at the time of purchase, and I won't run a carrier-modified (ala Sense, etc) build either. AOSP is near-perfect. I do miss visual voicemail, but I think there are workarounds documented on xda (I can't really be bothered to investigate, so I suppose that it is not bothering me too much).
I am using Darky's rom: http://forum.xda-developers.com/showthread.php?t=814091 It is stable, fast and does not have the strange GUI modifications.
TL;DR: It's easy, try it.