[Galaxy S I9000 Themes and Apps] appagom:
Several similar questions.

1) The app is supposed to have undo options. And typically they work. After udoing the lagfix, you can undo the ext2tools and you can then undo root. personally I don't think the service tech and samsung is combing through your phone to find any possible evidence of tampering. Are there actually reported cases of this happening? I brought a rooted lag-fixed phone with a kies busted SBL (bad usb cable I think) to samsung service center in korea and they fixed it up without complaint. They guy wasn't clueless either. Yes if you want 100% assurance it's EXACTLY like factory, if any undo process has gone wrong, or even if it hasn't.. you should reflash with Odin.

2)If you have used more space than what's free outside of the image file, or if you let your image file fill the whole partition (0 is free) when you installed. It won't undo.(I don't know why RyanZa doesn't use the sd card for temp space for undo, but he doesn't, z4mod doesn't have this problem) Solution, uninstall apps first.... or force it.

3) maybe something else goes wrong and it won't uninstall. again, you'll need to force it.

4)If you factory reset, yes the OCLF app will be gone. So what? get it back from the market. The app and the lag fix are two separate things. Get it back and try the restore splash screen option and sure, if you want try remove ext2tools too do that. Also if you forced it there will still be a /system/bin/userinit.sh file left behind that isn't doing anything anymore. Remove that if you want (if you don't use adb, maybe root explorer can help you) there may also be a /system/bin/playlogosnow file left behind(I'm not sure). That's a copy of your original splash screen.

5)If this doesn't work for some reason, you'll need to learn how to use adb and which files are modified, and it's possible to fix it by hand. Probably easier to read a guide on reflashing a stock ROM though and when this option is available why should you expect a devs to take lots of time explaining the technical ways to do it surgically for every possible state your device is in just to get it back to factory when there's already a tool for that?

6) To the question about an on/off button. You can't just turn this on and off. Well you can restore the bootlogo which will basically turn it off and loses your apps (but I don't think there's an option for turning back on) and yep that might make kies happy, but if kies modifies anything in /data(which it probably won't but who knows) that won't take and kies very likely will remove the scripts that in theory would be needed to turn it back on.. and thus ecover your apps. And some kies updates could wipe /data anyway. In other words just undo it. It's too hard to consider all contingencies, although RyanZa tries in many cases. Just follow the instructions and do it the right way.

7) Quit worrying about losing apps? Use titanium backup. Use the pro version for like 3 bucks (personal disclosures: none) to avoid pressing install a bunch of times. You'll have all your apps (and settings) back in a flash(well not actually a flash) with much less effort for you AND to the people who need to help you figure out surgical approaches to fixing your phone otherwise.

8) I'd still say go for z4mod. It doesn't have many of these issues (except for needing to undo before kies). Just make sure you're on a stock ROM first (it doesn't support all modified ROMS (modified kernels to be precise).

edit:

9)In case it wasn't clear.. no factory reset will not undo ext2tools or the scripts that start this working at bootup. It only clears /data and cache. It does not clear changes to the system files (it's basically not possible because there is no permanent backup of the /system directory on the phone)

10) no, ext2tools is not eating up space. Sure the files hav some non-zero size, but it's not in a place you could use the space it anyway.

Disclaimer and disclosure:

BTW I have no particular association with RyanZa, just a guy who knows a good bit about linux and this lag fix. My answers do not necesarily represent the advice he would give.