It's possible that they will block the phone by IMEI number, but I dunno.
Prepaid SIMs work fine in the G1 and all apps work as expected, given that there is by default no data. Learn to love open wifi. :-)
Might borrow a prepaid card (or get it cheeeeeep of eBay for testing) before dumping money on a refill card.
Inspire 4G, CM7.2
TMo PAYG (no data). How I use it.