NOTE: THIS WILL VOID YOUR WARRANTY. ALSO, I AM NOT RESPONSIBLE FOR ANY BRICKED/DAMAGED DEVICES WHEN YOU ARE DOING THIS PROCESS. YOU DO THIS AT YOUR OWN RISK. YOU ARE WARNED.
So you want to root and install Custom ROMs. The previous way to install custom ROMs was to flash a fastboot ROM, but not anymore. I've knew about this method for a while, but never tried it, but I tried it and it works, so here is how to do it.
First of all, if you haven't, update to Android 2.1 either using LG's official update tool or KDZ Updater.
Next, you need to root your phone.. I recommend Z4root, as it's simple, automatic and done right on the device. (For people using the V20C software, please use "SuperOneClick" instead.)
Download z4root.1.3.0.apk from here.
Put the file on your SDcard. Then, using a file manager (for example Astro) or APKInstaller, install the file. Open the app and then select "Permanent Root" Wait for the phone to reboot.
Congrats, your phone is now rooted.
Now, we need to flash Recovery, which will allow us to install Custom ROMs. Download the recovery image of your choice (I recommend that you use ClockworkMod Recovery 22.214.171.124 which can be found here.) and put the recovery_clockwork_x.x.x.x_swift.img on your SDcard (Rename it to recovery.img so it is easier to work with.)
Next, install YaffsExpert from the Market. (It's free ;)) Open it and in the first dropdown box, choose "Restore" and in the next, select "Recovery" press "Browser" next to the Operation File field. Select the recovery.img file. Make sure the "Target Device Model" is set to "All other" then press "Operation" wait for it to finish.
Ok, so Recovery is installed, Now we need a ROM to install. Select ANY rom you want, and download it's Recovery version (Either a recovery backup or update.zip) and install it in the normal way.
NOTE: If the ROM you want is only available in fastboot format, take a look at my guide on turning Fastboot images into recovery backups.
Any questions? Just ask below.
Hope it helps,