Unlocking your mobile phone offers you the basic freedom to be able to use any SIM card with your phone. When finished, you will be able to use the SIM card of any operator of your choice, and hence be free to use any SMS plans, data plans and call plans you want to. To unlock your T Mobile G1, you basically need the device's unlock code which is based on your mobile phone's serial number. Unlocking your mobile phone removes all the restrictions placed on it by your mobile phone operator.
There are many ways to unlock your T Mobile G1 -- all of them involve manually entering the unlock code into your G1.
To get your unlock code, you will first need to obtain your IMEI code (International Mobile Equipment Identity Code) which is unique to every phone. It is usually printed under the battery compartment of the phone.
An easy way to find out your IMEI on your T-Mobile G1 is to enter *#06# on your device's keypad and dial it. You will then see your 15 digit number. On a side note, it can be used by your network operator to identify stolen mobile phones and block them.
There are 2 separate steps you can take to get your unlock code: