A few days ago, the code for the Nexus One's 2.2.1 update went AOSP (Android Open Source Project), meaning that the source code became available to developers. It was comprised mostly of bugfixes and other things that weren't major... oh, and it also patched the exploits that allowed Universal Androot to unlock your device. We had a short conversation about it on Twitter with Cyanogen (the conversation starts at the bottom and goes up):

Image 9

As if breaking Universal Androot wasn't enough, apparently the new update also prevents existing installations of Swype and some other aftermarket keyboards from working. An easy solution exists though - just uninstall your existing keyboard and reinstall it.

The new code is all merged up with CyanogenMod 6 nightlies and ready for you to flash.

Update: In addition to the fastboot OEM unlock method that Cyanogen mentioned, the rageagainstthecage method seems to still work as well (thanks duckie!).