We saw a Pink Floyd-themed G1 multi-touch video a little while back, but it wasn’t very illuminating. This one is much more in-depth, and the (Canadian?) narrator reminds me of myself, so it was relaxing as well. Plus, his page explains in minute detail what’s going on and what we can expect from the device.
Let me break it down for you, fly CG style. The G1 uses a less exact sort of touchscreen than the iPhone, which is unable to distinguish fundamentally between two touches if they share an x or y coordinate. There are ways of hacking around this, but it’s different from a touchscreen that’s designed from the ground up to detect multiple touches and not let them interfere with each other (the hardware is different).
Still, the G1 is capable of tracking two touches at least, although three would almost certainly be impossible to manage, from what I understand of the system, or would be limited to simple gestures like a swipe. Fortunately, double touches work fine for most of what they are needed for: zooming and (with a little hackery) rotation.
The hack to enable the capability on your G1 is not easy to install for users, but is not technically a very low-level one. In fact, the kernel is already working in multitouch, it’s just in another interface layer that the extra information is discarded. So the hack sends the info around that layer’s protections and to a demo application. So it’s still not a consumer app, but it’s getting a lot closer, I’d say in six months we’ll have a solution capable of being installed by a grandma.