UPDATED
NOTE THIS IS FOR THE US VERSION (RC30) - FOR UK VERSION (RC8) CLICK this link:
http://www.androidfanatic.com/cms/community-forums.html?func=view&catid=9&id=220
It has been prophesized for weeks now, but it is finally here. A rollback method for RC30 users who want root. This method is a full device flash that will roll you back to RC29 which still has the root bug.
You will need the .nbh file to perform this. It can be downloaded below:
RC29NBH.zip (download on your pc)
http://www.megaupload.com/?d=4JM2SRJN
Installing
1. Format the SD card to FAT32 mode (this is sometimes needed. image not always found if other files are on the sd card)
2. Copy image file DREAMIMG.nbh to the SD card
3. Turn the device power off and insert SD card
4. Hold Camera button, and press Power button to entry Boot loader mode
5. Press Power button to start upgrade procedure
6. After it finishes, press the trackball and perform a soft reset by pressing Call + Menu + End to reboot.
Rooting Android
Start and connect to telnetd
This has been tested and is known to work on RC19 and RC29 on the G1. Google has already promised to patch this so check your version.
1. Restart your phone
2. At your phones desktop hit the
key twice and then type telnetd and press again
3. Download an Android Telnet client and connect to localhost.
4. you now have root!
This gives you a root shell (basically, but not technically.... its confusing, dont ask) which you can use to gain more power.
Alternatively if you have adb installed, you can use adb to forward a local port on your linux host to a port on the phone. This avoids the need to install a terminal on the phone:
# At your phones desktop hit the ENTER key twice and then type telnetd and press ENTER again, then on your desktop:
adb forward tcp:9988 tcp:23
telnet localhost 9988
Add busybox
Instructions Here: http://www.androidfanatic.com/cms/community-forums.html?func=view&catid=9&id=228
Protect your root
New updates from google are geared at taking all of this away from you. There are some things you can do to block OTA updates and even to keep root after you update. It is recommended that you do not merely block updates and stay at your current version because some bugs (especially the root bug) can pose a serious risk to security and privacy if left un-patched.
Now you really need to follow the link below in order to keep your root AND upgrade to RC8:
http://www.androidfanatic.com/cms/community-forums.html?func=view&catid=9&id=250#250
Thanks to DarkriftX at http://www.android-dls.com