As far as I can tell, you can't install froyo with working wifi yet. There's an update coming soon, supposedly today.

But an overview of installing Android is basically thus:
1. partition the microsd card (FAT32 partition1, ext3 partition2)
2. Extract rootfs to ext3 partition on microsd
3. Install bootmenu
4. Flash kernel

What you're seeing is that the various instructions are for different stages of the project-in-development. Once the rootfs changes (which we're waiting for now) the instructions change. Once the bootmenu changes (which just happened twice this week), the instructions change. Once the kernel changes (I think this is also going to happen soon), the instructions change.

But the basic framework for all of these steps don't change. You're probably always going to have to format your microsd card (once it's done you'll just have to erase the ext3 partition when you update). You're always going to have to know how to extract the rootfs. You're always going to have to install bootmenu (once they get a good, stable version (this one seems good to me) you'll probably be able to leave it).

And so on.

So in short my advice is to wait until the latest is ready. ToJa (I think it's him) will make an autoinstaller right after that and many of us will help him test it.