Only probably? A slightly buggy version already works... XDA Ready to Serve Dessert, Froyo Seen Running on a MyTouch 3G [Video] | Android Phone Fans Give it a month or two and I bet a fully working froyo custom ROM will be knocking around.
not slightly buggy if it isn't usable as a daily driver. If you have a spare to play with then it is fine. For now the 2.1 is really good. 2.2 will no doubt be even better before long.
2.1 works fine on the Magic, you just need to root your phone and apply a 2.1 based custom ROM like cyanogen 5
Cyanogen 5.0.7 is a working, stable Android 2.1 ROM. It's been my daily driver for the past few weeks (well, it and a couple of the test versions). I highly recommend it if you're looking for a 2.1 ROM. There are also Smoki, CapySlide, and SuperD 2.1 ROMs, (and likely a few others I'm forgetting) but I have no experience with them at all. Check out www.xda-developers.com to find just about anything you could want for a ROM. They'll be in the "myTouch 3G, Magic Android Development" forum.
Installed Froyo on an HTC Magic last night. Some trial and error involved, but I am amazed at how fast it runs. Every now and then there is a little lag, but nothing that the user of a Magic wouldn't already be used to. I've yet to run into any FC, but then again, I haven't really hit it that hard (still running off WiFi since it's for someone else and I need their SIM to real-world test). Just follow the directions on the Cyanogen Wiki, don't improvise, and be patient.
Buy
Buy