The Update for Android to Version 1.5 is available to Download from Google. I recently updated my G1 to the new version sucessfully. Please remember that this is probably a European version of Android (don’t know for sure), so please be careful @ US guys. Here is the tutorial:
Download the file and rename it to update.zip. Then put it in the root folder on your G1’s SD card. Then turn off your G1 completly. To start the service update press the key combination [Home]-[Quit], and keep them pressed until a warning sign appears on the screen. Then press [Alt]-[S] to start the update. After installation the G1 reboots twice and then its completed. You have to have Android v1.1 to install the update.