Sorry about the long title, this device goes by a lot of names.

My wife and I recently switched to T-Mobile, as a direct result of my Verizon Wireless Experience. We had definitely decided on getting an Android powered phone, but we had not yet decided on the HTC Magic (the MyTouch 3G) or the HTC Dream (The G1). After playing with the Magic in the store for a few minutes, we decided that a physical keyboard was a necessity, so we picked up 2 G1s at Walmart. Walmart is an authorized dealer for T-Mobile, and like with everything else, Walmart's prices cannot be beat. It's $100 cheaper per phone to buy them at Walmart, and all you lose is the extended T-Mobile warranty, which no phone company ever honors anyway. [EDIT: My phone broke, and T-Mobile honored the warranty even though I purchased it at Walmart. Win!]

(See my take after the hype wore off.)

First Impressions
The phone comes with a partial battery charge, and when it first boots it walks you through a little wizard which asks you for your gmail login and password. Before we had even left the store we had our gmail, google calendar, and contacts auto-filled. You WILL have to start using your gmail address book as a phone book, but it's easy to manage on the phone or online. Bringing the phone home and playing with the settings and the built-in apps was very fun, but it definitely left something to be desired.

Built-in Apps
Most of the built-in apps are sloppy and lazily done. For instance, gmail on the blackberry is far superior to gmail on Android. On Android you can't hook up multiple accounts, you can't reply from the context menu, and "All Mail" is hidden in the list of labels. The rest of the apps give the same unfinished feeling. There's no file browser for the phone's built-in memory. Once you download a ringtone that's it, you have it forever. If it was exceptionally large, too bad. The built-in camera app is also fairly useless, especially considering the camera itself isn't that great and doesn't come with a flash. The built-in browser is very impressive however, working on webkit and rendering and scrolling very smoothly. The built-in YouTube viewer was disappointing. It doesn't save your place, and it occasionally picked the wrong youtube server so it would buffer for ages, even when hooked up to wifi.

Hardware
The hardware is also very good. The phone looks and feels a little awkward compared to an iPhone, but compared to everything else it's ok. The fact that the camera doesn't have a flash is a little mystifying, it means that the G1's camera is terrible compared to even my Blackberry's camera. The phone DOES support GPS, Wi-Fi, bluetooth, and 3G networking, plus it has an accelerometer and compass so it can detect movement and position. The processor and memory are both adequate, though you can see some considerable slowdown with multiple background apps running. Google made a brilliant choice in allowing background apps, but then dropped the ball by not allowing you to CLOSE any apps. Apps that don't auto-close remain open until the phone is rebooted. This is sloppy and stupid. The battery life is decent for a smart phone, though for the first few days you'll be reconsidering your purchase. Apps, videos, and wi-fi kill the battery life, I recharged my phone 5 times in the first 4 days I had it. Once you stop using it as a toy and start using it as a phone the battery life is much more acceptable. I also like to use ToggleSettings to turn off wifi, gps, and bluetooth when I'm not using them.

App Market
The App Market is where the real meat of the enjoyment comes from. There are hundreds of games and special apps that really increase the usability of the phone. In particular, these were the apps that I ended up with:
Android VNC It's a VNC client for your android phone. You don't think it's useful until you need it.
Bank of America Account Manager If you're a BoA account holder, this will let you check balances and statements from the phone. Very handy.
Better Terminal Emulator Gives you a command-line for the phone. It's kind of useless until you root the phone, but there it is.
Call List This is actually a call faker program. Once activated, you can configure a fake call to ring your phone at a scheduled time in the future from a particular contact. There's also a quick "call me in 15 seconds" option.
Color Flashlight Turns your phone into a flashlight. Comes with a color selector, a message flasher, and a strobe/HELP option.
Compass Using the magnetometer, turns your android screen into a magnetic compass. With GPS built right in, this is more of a novelty, but I can still see how it would be useful.
Continuous Shot A multi-shot camera app. With the camera being so terrible you may need to use this on fast-moving or otherwise difficult subjects, like children.
Divide and Conquer A *Qix clone, fun little game.
Doom This is actually DOOM, complete with WAD downloading service. It runs pretty well, though it's hard to play on a trackball. Cheat codes still work.
Gensoid A Sega Genesis emulator. ROMs acquired separately.
Glympse Glympse is a GPS location sharing service. You can send a "glympse" of your location to other Glympse users or just to an email address. I prefer this to the sort of always-on location sharing services that you'll find on the Market.
Google Voice Enables your android phone for your google voice account. If you don't have a google voice account, too bad for you, it's awesome.
Key Ring Scan the barcodes off your store membership cards, and the phone will display scannable versions so you can throw the cards out.
Labyrinth Lite Remember that stupid wooden labyrinth game you used to have as a kid? This is a digital version powered by the accelerometer. Awesome. As of this writing the "full" version isn't in the app store, but I'm totally buying it when it comes out.
Last.fm Streaming music, works REALLY well at both streaming music and sucking battery life. It even streams acceptably over 3G.
My Account Access T-Mobile account info. Mysteriously tells me I'm using too many minutes every couple days.
NESoid NES emulator.
OI Shopping Shopping/to-do list manager. You can send lists to other OIShopping clients, so that's handy.
PAC-MAN It's pac-man, what do you want me to say?
PapiJump Tilt-sensitive game, clever. There's actually about a dozen Papi games, I haven't tried them all.
Picaross One of my favorite logic puzzles.
PureRSS VERY clean RSS reader. You have to type the RSS addresses in by hand as far as I can see, so that's the only downside.
Ringdroid Takes mp3s from the memory card and makes them ringtones, with on-screen editing. Very slick.
Screen Crack Fakes a broken screen for when you want people to stop asking to check out the phone, or when you want to scare someone into thinking they broke it.
Shazam Identify music using the phone's mic. Very slick, though sometimes it takes a while.
Sherpa Local search, learns what you like to do, very cool.
ShopSavvy Scan a barcode, it shows you the physical and online stores carrying that product
UPS Tracking
Sky Map MUST HAVE. Take the phone outside at night and point it at the sky, this identifies the stars and constellations.
Snap Photo A better camera app, allows for white balance editing, timed shots, color effects, etc.
Spare Parts More phone settings, including reprogramming the damn end key.
Speed Dial Creates desktop shortcuts for just about any action.
Sticky Memo Widget A widget for sticky notes on your desktop.
TextOnPhone Ebook reader. Kind of crappy and dubious legality, but hey, books on your phone!
The Weather Channel Best weather app I found
Throttle Copter Great stupid little game
Toggle Settings App to toggle just about everything that can be toggled
Torect Logic game
Ultimate Stopwatch It's a stopwatch. that's it.
Voice Recorder Allows for recording and integrates with gmail.
Visual Voicemail Gives you buttons for delete, skip, etc. Also shows you icons for all your messages so you don't have to listen to all the saved ones to find the one you're looking for.
Wapedia Really awesome Wikipedia app. Better than going to the site.
WordUp Sort of a one-player boggle.
XGalaga It's Galaga.

Overall
Overall, the Android platform could still use some work. No local file management for deleting rogue files, no ability to control running processes, and relatively crappy built-in apps means the default platform is very unimpressive. Once you allow third-party developers to improve upon it, it gets much more interesting. SkyMap is one of the best examples of this. Using GPS, the compass, and the accelerometer to actually give a real-time label to what you're looking at in the sky is amazing. However, google could stand to work on their branded apps a little more, specifically youtube and gmail. Google maps I haven't used all that much, but I imagine it suffers from the same sort of general lack of polish.

As for the hardware, there are only 2 android phones in the US right now. If you want a keyboard, you need to get the G1. I'm eagerly awaiting the release of a phone with a better camera, faster processor, more internal memory (apps can only be installed on internal memory, not the SD card) a full keyboard, and a form factor that doesn't include an annoying "chin" that makes the phone difficult to put into a pocket.