From ModMyGPhone Wiki
This isn't the fast tethering you would hope for, but it works nevertheless. This workaround involves using the SDK for internet like we devs used to do when G1 was not released. If you are a developer, most of the following setup steps are already done, for other users, read on,
Steps::
1. Download and install this app for G1.
2. Enable debugging on G1. Go to Settings > Applications > Development, and enable USB debugging
3. Install the G1 driver. Instructions are provided here. Not required for Mac.
4. Download the ADB utility if you don't have the SDK.
5. Start the "Proxy App" on the phone and press "Start Proxy".
6. Now, using console, go to the unzipped folder of the ADB utility you downloaded and type this command,
for Windows: adb forward tcp:8080 localabstract:Proxy
for Linux/Mac: ./adb forward tcp:8080 localabstract:Proxy
7. In your desktop web browser, setup HTTP proxy with name localhost and port 8080. For firefox that would be at Tools > Options > Advanced > Network > Settings
