I just added the HTC Hero keyboard to my G1 and it is a beast. Here are the steps and tools you need.
D/L the file from here.
http://haykuro.theiphoneproject.org/?p=213
1. Install eoeAppInstaller or ASTRO file manager (I already had the latter so that's what I used)
2. Copy HTC_IME.apk to your sd card
3. go to menu, settings, applications, and check the box to allow unknown sources
4. Launch eoeAppInstaller or ASTRO file manager, go to HTC_IME.apk, click it and select install
5. When it's done, exit and restart the phone
6. Go to menu, settings, locale and text, you'll see a new option called touch input. Select the check mark and go into touch input options to specify preferences. Don't mess with the calibration option as this doesn't work on the magic (I tried, it just force closes)
7. To activate the keyboard, go anywhere where you need it, e.g. start an sms, then click and hold the text box, select input method, select touch input (you can change back anytime in the same way) and that's it!
Enjoy.

