Android G1 factory reset

With the phone off and the battery in, press and hold <power>+<back> for 20 seconds or so. You'll get the standard G1 splash screen, then a screen with an exclamation mark.

Press <alt>+<L> to get to the System Recovery screen. Here you're presented with four options:

reboot system now [Home+Back]
apply sdcard:update.zip [Alt+S]
wipe data/factory reset [Alt+W]
wipe cache partition

Which you should be able to choose from with the scrollball or use the key combinations for.