Proxoid app on G1
My G1 is using Android OS 1.6 and I doubt it will ever get the 2.x line. There are probably a bunch of tethering apps but the one I downloaded was Proxoid. When you open Proxoid, there is basically just an option to change ports and then a start / stop button. It crashed once but otherwise it appears reliable. When I was to tether my computer, I open Proxoid and click Start.
I assume that all tethering is the same: you start the proxy app on the phone and then use adb from the Android SDK to forward some TCP port on the computer to a port on the phone. Download and install the latest Android SDK and then add the tools directory to your PATH.
I forward TCP port 8080 on my computer to port 8080 on the phone. Port 8080 is currently the default port that Proxoid uses on the phone.
adb forward tcp:8080 tcp:8080
It isn't necessary to use Chrome but it is easy to open Chrome using a proxy and not have to change any settings. You could easily do this with FF or Safari if there is a command-line option to use a proxy or if you find the proper configuration settings.
/Applications/Google\ Chrome.app/Contents/MacOS/Google\ Chrome --proxy-server=localhost:8080