This allows you to flash an ***.img file to a specific partition on your phone without making a zip. You can also make a HERCIMG.zip (a zip with multiple images in it ie, system.img, data.img, boot.img, recovery.img) and flash that straight from hboot.
What s-off does is unlock hboot to be able to flash any HERCIMG.zip you provide it. It bypasses the need for HTC's private keys to have signed the zip, so you can make your own HERCIMG.zip with whatever image you wish to flash inside it (say the old grey on black HTC splash screen, or an engineering SPL) and it will flash with no problem.
This is completely permanent. It is below the radio level, so even if you RUU, it will still be s-off. Basically you will never have to "root" your phone again. You just flash something from the bootloader and it will work (for example, you RUU, then go into the bootloader and flash a recovery right away)
To verify successful after flashing, reboot to the bootloader. You should see "S-OFF" on the top.
For more information please go to http://unrevoked.com/forever
For the S-ON Method go HERE
Before you flash this, you NEED to upgrade to the newest hboot, version 1.47.0000 (due to finding variances in testing). You can do this by nandroiding, then running the Official 2.1 RUU in my rooting thread (post #2) and then rooting again and flashing this, then restoring your nandroid backup. You can check your bootloader version by typing (in command prompt)
adb shell cat /proc/cmdline
No one is responsible other than yourself if anything goes wrong after flashing this. We have had extensive testing with no errors.
Flash this as a normal zip in recovery.