After months of having a totally stock tmobile G1, I've finally bitten the bullet, rooted my phone, and installed a pre-packaged new and improved firmware and OS, CyanogenMod. What fun! It's actually noticably faster, as it runs the processor a little more (which hurts battery life a bit), and it also has some great nerd toys built right in.
To tether via USB, which is a feature added by CyanogenMod version 2.5.3 and up, it seems that one must use a recent Linux kernel (it didn't work with 2.6.26, but does work with 2.6.31- i'll track down the changeset that enabled this). I've yet to get it set up correctly, as I've been testing on a comparitively ancient IBM Thinkpad T30, and I'm worried that there's something funky with it. Soon I'll get it working and write a how-to guide.