I have had this handset pretty much since its first week of release.
I will start with a review of the size itself. The phone was in consideration by me as a result of it having a slide-out keyboard. I do not like the virtual keyboard, and to be honest - the size is not nearly a big deal as everyone says, its about the same thickness as a deck of cards, and really has a great interface for being the first version of the phone and OS.
the Operating System originally was very sluggish and had a hard time updating email and contact lists.. and the browser took a few longer seconds to load. As of about a week ago, the phones are now updated. Mine updated itself and after that, the sluggish-ness pretty much lessened to un-noticeable and even the battery life was extended, as a rsult of the phone not draining so much power using applications. It seems and feels a bit more streamlined.
I do not like at&t's service or customer service.. i would have liked an iPhone but again, I don't care for the virtual keyboard. I really love my G1. I only gave it 4 stars because the customer service at T-MOBILE is ridiculous as well. They outsource like many big companies, and half the time I have to re-explain myself to 3 or more different people because the operator doesn't know what I am saying.
I would give this phone a shot.. or wait till verizon has their Android phone on the market later this year.