You probably already heard about this. CyanogenMod is the most popular ROM, supporting nearly 50 devices in the present. It is the oldest ROM, too, being in development since Android 1.6 Donut.
"CyanogenMod (pronounced sigh-AN-oh-jen-mod), is a customized, aftermarket firmware distribution for several Android devices. Based on the Android Open Source Project, CyanogenMod is designed to increase performance and reliability over Android-based ROMs released by vendors and carriers such as Google, T-Mobile, HTC, etc. CyanogenMod also offers a variety of features & enhancements that are not currently found in these versions of Android." - their own description.
And they're not lying. CyanogenMod is the best ROM based on AOSP. It's fast, it's stable, it's neat... it's basically the vanilla version of Android (2.3.7 by now), with some system optimizations (and by some I actually mean plenty), visual enhancements, new features etc. I'd reccomend you flash this ROM (given you have a supported device) and try it out. It's a must-flash (so-to-say), if you're a modder. It's an experience you must go through in order to be a true Android modder :D .
There are plenty of features CyanogenMod is stacked with, but I'll only name a few (to spare you the other thousand). You will get :
-pulldown notification toggles
-swipe to clear a notification
-different lockscreens (with advanced options, too)
-a lot of new Settings
-you can adjust the CPU frequencies & kernel governor straight from the Settings menu
-you get system UI themes (T-Mobile style)
-ADW Launcher (as app drawer) included
-enhanced flashlight application (called Torch -> normal/bright mode for the LED flash)
-DSPManager (enhanced audio adjustments)
-Incognito in Browser
-Render effects for display (enhance battery, for some options)
Below are some screenshots (grabbed from CyanogenMod's "About" page)
The home screen
The app drawer (vertical style)
The theme chooser
The pulldown notification bar with toggles
The "Performance" menu
One screen render effect (there are many, as shown)
The latest version of CyanogenMod is 7.1.0 (stable). Release Candidate (RC) builds are being released once in a while, and from that point to a new stable version is not too long. You also get nightly builds every day, so you can flash them without having to wipe everything (except for cache and dalvik) every time. Nightlies are highly unstable and probably broken builds (as Cyanogen states in ROM Manager's Download ROM menu). That statement might be true, but some nightlies are actually BETTER than the stable releases -- however, this is rare (once a week, maybe). Anyway, if you're into that stuff, you can head over to the changelog page for nightlies and see what new things the developers include in everyday's builds. Doing so (going for the nightlies) does require the pro (paid) version of ROM Manager in order to be able to download the builds every day, or you may download them from CyanogenMod's "Devices" page (under Nightly Builds for each device).
Also, it isn't CyanogenMod's fault if you happen to damage your phone in any way. It's not my fault, neither. I have flashed my phone over 200 times now (no kidding) and it's still alive, so... I'd say bricking your phone by flashing CyanogenMod (or any COMPATIBLE ROM, for that matter) is highly unlikely.
If you overclock your CPU too much and leave it like that, with the screen's brightness set to max... you might run into troubles later, yeah... but then again, that's nobody's fault but yours. So, take care at how you torment your phone, and don't blame others if you ever do so (let's hope not).