Instructions To Download and Install Android 2.3.6 On Nexus One
1. First step is to Download the update from here
2. Now Rename the downloaded file to update.zip.
3. Now in the third step Copy the update.zip file onto your microSD card.
4. The most important part is to turn your nexus one off and, hold down the trackball and press the power button.
5. You’ll be booted into a white screen with three Android robots on skateboards. Select “Bootloader.”
6. On the next screen, select “Recovery.”
7. Your phone will reboot, giving you a picture of the Android robot and an exclamation point inside a triangle.
8. Now press the power button and volume up button at the same time. It could take a couple of tries.
9. Now (using the trackball this time) choose “Apply sdcard:update.zip” and let things run their course. Reboot and enjoy