The SLCD should have better battery life while browsing, worse while watching darker movies.
It's normal. My old Nokia mobile phone (not smartphone) got hand-warm while playing simple games, too. Now, the Desire, is a smartphone with a very powerful CPU and GPU. It's no surprise that this thing heats up. The processor even has a heat spreader. The processor is located near the USB port, so this part will get warm while playing games, navigating or doing long web surfing sessions.
All smartphones, using the latest technology have this issue, because all smartphones use the same technology and get passively cooled.
It's nothing to worry about. You can reduce the heat and increase the battery life by rooting and flashing an undervolted kernel.
PS: The Desire never does get that hot that it will burn your skin. So it will get warm, maybe warmer than your skin temperature, but nothing to get worried about.
PPS: I haven't noticed a difference between 2.1 and 2.2. 2.1 cause temperatures above 40 Degree Celcius sometimes, 2.2 also. Since undervolting I never reached that high temperatures again.