Update: See more on this here
James Losey from New America Foundation writes, "I thought you might be interested in a new 'feature' of the latest Android phone. Officially released tomorrow October 6, some T-mobile stores began selling the HTC G2 yesterday. Within 24 hours, users have discovered that the phone has built-in hardware that restricts what software a device owner might wish to install.
Specifically, one of the microchips embedded into the G2 prevents device owners from making permanent changes to the Android operating system, re-installing the original firmware."
Plugging a USB wireless modem into a laptop for T-Mobile's broadband services does not mean that T-Mobile can say that Ubuntu Linux is not an approved operating system, or that Skype is not an allowed voice service. Yet when unsuspecting members of the public buy Google's Android G2 at a T-Mobile store, they aren't getting a customizable mobile computer or phone but are instead getting a device where the hardware itself dramatically limits users' right to make changes to their computers and install the operating system of their choice.
Clearly, this is a major new initiative to control users rights to run their computers as they see fit. Instead, the new Google Android hardware rootkit acts just like a virus — overriding user's preferences to change settings and software to conform to the desires of a third party. And just like a virus, this kind of behavior should be just as illegal. Users of the new Google Android G2 should be warned that their device has a rootkit that will overwrite their software modifications. We are seeking further clarification as to the legality of this malicious software.