PhoneNews.com can confirm that the first full T-Mobile G1 update, RC29, has a major bug that could potentially render a device useless.
The update causes all text entered onto the device, to be entered as a shell command. This is most easily resonated by typing reboot after powering on the device, followed by the return key. This can allow a user to activate the root user, and then enter any command on the device with full access to data.
Obviously a major exploit, Google has patched it in the next update, RC30, which has been approved and in the process of being released.
Unfortunately, there is no way to tell if your specific T-Mobile G1 is being updated with either the RC29 update, or if you chose to wait for the RC30 update. The only way to know, is after the device has been updated.
The update highlights some of the downsides with modern Firmware Over the Air (FOTA) implementations. While wireless software updates are generally a good thing, they require documentation so that the user can be informed about the specifics of the update. Here, a user has no way of knowing if they are getting the exploited update (RC29) or the fixed update (RC30).