The cause of the long delay in releasing the FroYo update lies in Motorola's extensive testing of the update. However, the update is not yet available for all countries in which the Milestone has been sold. It seems likely to me that there still needs to be some agreements made between various cellular providers in order to get this update released in all regions.
Surprisingly, according to the official Motorola update page, the update will erase any DRM files saved onto the phone's SD card and that some unspecified applications may perform worse in FroYo than they did in Eclair. Here are the release notes for the update.
Users looking to update will have to do so via MSU (Motorola Software Update). Head over to this site to get started enjoying FroYo, that is, if your country happens to be one of the ones currently included.
Image from Engadget