I’m new to SetCPU on Moto Droid and need help

1. That's going to depend on how much you're using it during the day, I would say start at 700 and move it around until it feels smooth for you.

2. I wouldn't push the phone that high, first it's going to overheat pretty quickly, which can permanently brick your phone. Even 800 is going to be rough on it so I wouldn't leave it up that high for very long.

3. I've got an eris (Did a little looking around, and the Droid CPU is set at 550Mhz whereas the Eris is set at 528Mhz as reference points) so this is going to be a little different than what you've got, but here's my profiles so you can tweak as needed.

Temp > 36.9 C 528Mhz/160Mhz Priority: 100 (This is the failsafe setting, if the phone get's too hot it'll cut the CPU speed so the phone can cool down and prevent any damage)

Charging/Full 729Mhz/528Mhz Priority: 80 (If the phone is plugged in, it can run a little harder, but I also don't use my phone much when it's plugged in)

Battery < 100% 710Mhz/528Mhz Priority: 50 (This is the normal use setting, which keeps the phone moving smoothly, but doesn't get too hot)

The most important thing is that you have scaling set to ondemand. This will turn the processor down if it's not being used. Hence, on the last setting, it is very rarely at 710Mhz and is most often below 550Mhz.

Second to remember is not to set the minimum too low, or the phone will have trouble waking up from sleep. You'll need to do a little digging around to find out what the ideal min is for the droid, but I would suspect above 160 Mhz would be safe for you.

Those should cover most bases, at bare minimum add the failsafe profile so that you don't lose your phone.