Hi all. New to the forum and brand new at rooting android phones. After a lot of reading and searching and trying I managed too achieve root last night on my Desire hd running 2.3.5 using the Ace Advanced Hack Tool. It took a few attempts for the phone to accept the downgrade. I had to run the hack tool several times to achieve this. In the end as the effin manual says I had to turn off all anti virus and close non essential programs. I also removed any anti virus apps from my phone. I don't know if it was coincidence or not but I was about to give up and had unplugged the USB cable and was in the bootloader menu about to reboot when all of a sudden it read the zip file on the SD card and downgraded the ROM. After that ran the Hack tool again and Now rooted, S off and Custom ROM (CM7) installed. One other quick thing, after installing CM7 on boot up it went into a boot loop. After searching found out you have to clear/reset factory settings and clear cache in custom recovery before flashing a new ROM. Hope this helps.
edit - forgot to mention I had the bootloader unlocked from HTCdev site but re locked it just before the downgrade started working.