In fact, people have been saying for months that both Android and the T-Mobile G1 hardware have low-level support for multi-touch. And while this isn't the someone has demo'ed multi-touch on the G1, you can actually enable it yourself on your own G1.
However, as Luke Hutchison says, this is proof-of-concept. And, quite honestly, you'll likely void your warranty and possibly brick your G1. This is definitely not just a load-and-run type of installation.
It also doesn't work everywhere, but this is just the first release and he'll be working on optimizing it.
Too technophobe-ish to try it yourself? Enjoy the video below.