I don't know why flashing back to stock would cause you to need to root the phone again, but I read where the person says that. You should familiarize yourself with the root process anyway, just so you know how to should you need to. Here's a place to start:
Step by Step Rooting Instructions: for Huawei Ascend - Android Forums So if you want to flash back to stock, you know how to get back to root.
If you don't want to bother with that and you just want to flash another ROM, here's a couple that I found:
[ROM][Huawei U8120]Android 2.3.7 - Cyanogen Mod 7.1.0 - update 15 - xda-developers
[ROM]CyanogenMod 7 for the huawei Ascend II M865 - Android Forums
There doesn't seem to be a whole lot of dev work for that phone, but I don't own one and so I haven't looked around much. Ask around in those threads I linked and I'm sure some of them can turn you on to what's new and available for your phone.