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Help G1 t-mobile total newbie rooting HELP

So T-Mobile's not going to be making any Android updates for the G1 past 1.6, correct? Guess that makes it a no-brainer now to root my phone, right? I would love to be able to free up internal memory so that my phone runs a little bit smoother. As of now, I usually have to reboot every day. Would also like to see what new features the newer builds of Android have (that would actually apply to and work on the G1). Btw, is CyanogenMod what everyone uses?
 
My friend gave me a used G1, and I wanted to set the passwords to factory settings so I could set up email, download apps etc. So I powered off phone and held down the "home" and "end" button. The phone took me to a the Android system recovery screen. I selected Alt+W to wipe data/factory reset. No screen came up with triangle with exclamation. Now I have a blank screen and the phone won't do anything. What should I do.. please help!
 
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