The thing to keep in mind with the G1 in particular is that it is a 1st generation android phone, and it runs a fairly old version of Android (v1.6), and AFAIK there are no plans to issue official updates to bring it to something newer. If you go into the market, it simply doesn't show you apps that require a newer version of Android (2.1 or 2.2, for example).

My current phone also runs 1.6, but in theory Moto is working on an update to version 2.1, and will hopefully be released in a few weeks.

It is possible to hack the phone (i.e. root it) and force an update using ROMS you find on the internet, but there is always the danger that if you screw something up you can brick the phone.

http://en.wikipedia.org/wiki/HTC_Dream