Luke Hutch has improved on his modified Java stack method and has provided a full G1 image that has multitouch support built into the kernel. It’s a little rough around the edges, lacking OpenGL support on the zoom features, but the idea is there. Somebody just needs to come forward and do the necessary work on the hacked applications to make them run smoother.
I posted recently to show that working multi-touch input is available on the T-Mobile G1 phone. Now the necessary changes to the Android software stack are finally in good shape, and the software is easily installable on your own phone. (”Easily” being a relative term of course — you have to re-flash your phone’s firmware, and that may void the warranty…)