[G2 and Desire Z Q&A, Help & Troubleshooting] lineaira:
Hboot

First, to load an custom rom you do need load the Desire Z engineering HBoot. If you have done so, you need to flash a recovery image (I use Clockworkmod) and install a custom rom for your vision (this is done in the tutorials further down this post).

Second, the trackpad should be set in the keylayout, if the wrong keynumbers are assigned to the trackpad functions it won't work. But this is indeed set in the rom. (on an rooted device you can access the configuration file trough an root explorer, like ESFileExplorer, just download from the market.., the keyboardlayout files are in /system/usr/keylayout/ depending on your rom you can edit these files, mostly qwerty.kl Generic.kl vision-keypad.kl or vision-keypad-wwe.kl, this should look something like this:

key 232 DPAD_CENTER WAKE_DROPPED

key 108 DPAD_DOWN WAKE_DROPPED

key 103 DPAD_UP WAKE_DROPPED

key 105 DPAD_LEFT WAKE_DROPPED

key 106 DPAD_RIGHT WAKE_DROPPED

in all those files... depending on your rom.)

So HBoot won't fix your trackpad problems, it's all set in the rom. HBoot just enables you to load custom roms. If you wan't to stick with your current rom, you need to look if those settings are correct.

NOTE:

If you can't edit the file but you can read them, first check in the explorer settings if /system/ is mounted read/write, if so and you still can't edit the files

you can use an adb shell to chmod the file to 777 by typing:

adb shell
su -
cd /system/usr/
chmod -r 777 keylayout

OR do the the same from the phone through an terminal emulator:

su -
cd /system/usr/
chmod -r 777 keylayout

and change again.

Follow for Desire Z (only from Froyo or Gingerbread, but as you said you're on Froyo already) this tutorial to install HBOOT and gain root:

http://wiki.cyanogenmod.com/wiki/HTC_Desire_Z:_Rooting#Root.2C_S-OFF.2C_the_ClockworkMod_Recovery_.26_the_Engineering_HBoot_for_the_HTC_Desire_Z

if this ain't working it could also be that your device is an G2, but as you're on vodafone I highly doubt that... still then try this tutorial:

http://wiki.cyanogenmod.com/wiki/TMobile_G2:_Rooting#Rooting_the_TMobile_G2

Then you can load an custom rom, using an recovery image like Clockworkmod:

take your SD card out and put the desired rom on it. Rename the package to: update.zip

Put the SDcard back in your phone and start the phone by holding power and volume down together. The phone boots and displays the HBOOT, first it will start looking for Stockroms on your SD, if those are not there it will display an menu. Use your volume buttons to select recovery and confirm with the power button. This should restart your phone and ClockworkMod should come up. with the volume buttons or the trackpad you can select options and power and trackpad center buttons will select the options. Do a full wipe ( option: wipe data or something similar) go to advanced options and wipe the dalvik cache. Go back to main and select install from SD, (or again something similar, I can't remember precisely) use the update.zip you placed on your SD.

This will delete all data on your phone, but the data on your SD will be save.

After it finishes you can reboot the phone in the mainscreen. Note that the first boot with an custom rom can take up to 10 minutes to load... if the rom won't boot, no worries, just try another one. CM7 is a good one, or if you want ICS (Ice Cream Sandwich, Android 4.0.3) try Andromadus or CM9 (CM9 is not yet officially deployed and needs some work with the microphone and camera, apps as gstrings and voicesearch won't work yet, unless you manually use the audiodrivers from JIBwitch) I can't say anything about Andromadus, as I didn't test that rom yet.

CyanogenMod 9 pre-Alpha

Andromadus Rom