Dev Phone 1 is good for many things that the stock G1 is not -- hardcore geek street cred, developing Android apps, exercising your 1337est hacking skills -- but one thing it's not good for is buying and enjoying paid apps out of the Android Market. It seems Google has disabled access to paid apps from Dev Phone 1s, likely in response to the almost-immediate discovery by users that rooted devices had access to the hidden folders where the apps were stored, effectively making pirating them trivially easy. In all likelihood, the move doesn't actually have anything to do with whether your phone is radio unlocked -- it's the rooting that's the concern, and frankly, we're a bit shocked at Google's naivete at thinking these things were going to stay protected without at least a glancing effort at real DRM. You'd think that developers willing to shell out $400 for the device aren't going to take too kindly to being locked out of the goods -- which, ironically, could be their own -- so let's hope Google's planning on cleaning up the shop and opening back up sooner rather than later.
Update: Get a load of this -- we have an unlocked, rooted G1 on hand, and it still has access to paid apps. Same problem, essentially the same phone, but Google's glossing it right over. If we had an ADP1, we'd be fuming right about now.