This has been a frustrating error but after a couple of weeks I finally got it installed. Now I just need to check out the tethering in my PC at home.
)
this is how I did it
1: go to Settings->Applications->Development, Turn on USB Debugging. (I know this has been stated several times but I am a step by step person)
2: Download the Tetherbot program
http://graha.ms/androidproxy/Tetherbot.apk
and the ADB Program
http://graha.ms/androidproxy/AdbWin.zip
Unzip the ADB program to the root of your C:\ Drive
3: With the recent updates mounting has changed on the g1 it is not automatic any more. Plug your g1 into the usb in the notifications tap on the USB connection and select Mount
4: On your PC open your g1 (sdcard) in folder view and copy the tetherbot.apk to the sdcard
5: from the command prompt got to the root of c (C:\) and type in this
adb install <the sdcard drive letter>:\Tetherbot.apk
for example if the sdcard mounted on drive F the it would look like this
adb install F:\Tetherbot.apk
I hope this helps people having the same issue of application install unsuccessfull