- boot the phone in fastboot mode by holding BACK key while rebooting.
- In COMPUTER command line, type "fastboot boot cm-recovery-1.4.img"
- nandroid backup
- download CM 4.2.1 http://www.cyanogenmod.com/downloads/rom
- download Android 1.6 "Recovery Image" from http://developer.htc.com/adp.html#s3, NOTE: NOT the ION image, it's the ADP imgage.
- put both zip files on sdcard
- "fastboot flash recovery cm-recovery-1.4.img"
- press MENU to power off and HOME+POWER to boot in recovery mode, don't use "fastboot reboot"
- wipe
- apply Android 1.6 "Recovery Image"
- reboot
- HOLD HOME key while rebooting
- apply CM 4.2.1 image
- reboot
- done!
This is basically what the official guide on xda says, and is much easier than the guide on cyanogen wiki: http://wiki.cyanogenmod.com/index.php/Full_Update_Guide_-_G1/Dream/Magic32B_Firmware_to_CyanogenMod
Other good references:
