I just want to interject and reinforce the beauty of OPEN.
Some people will love the G1 hardware from HTC. The trackball and chin on the bottom are actually very useful and the keyboard is rather nice. I hate touch screen keyboards.
Others will HATE it. But any carrier and any manufacturer can come out with another Android device. With different specs. With different features. Different shapes, sizes, weights, materials. Its not like we're all waiting on HTC and T-Mobile to come out with the next Android phone 1 year from now.
Not everyone will like the G1 and the companies clearly went for the mainstream consumer with this model. Its a good choice for a starting Android device. There will be plenty of other Android devices focused at the higher end and lower ends, too. This one is somewhere in the middle which gets everyone's attention.
By the way, I think it looks ugly... in PICTURES. Once you're holding the device it looks rather nice.