So, I have an original Droid (rooted), that is also my working cell phone. Can I load 2.3.4 onto it to develop accessory apps?
If so how do I load the new OS?
One option (probably the easiest) would be to install CyanogenMod on your phone. I don't recall offhand if the latest stable release (7.0.3) is based on 2.3.4 or 2.3.3, but you could certainly use a nightly build instead which would be 2.3.4. The forums for the Droid can be found here, and they have a section for stable builds and a section for nightly builds that you can take a look at.
For detailed instructions on how to prepare and install CyanogenMod, the best resource is their wiki page.