Lots of users in 3-5 different threads are running into problems where they get an error about unable to mount the SD card, causing the upgrade to fail. After lots of reading and searching I have found 5 users who get the same problem. All 5 are using the 1GB card that was included with their G1. 3 of them have tried different versions of fat16/fat32 and still failed. Those 3 have tried a different card and the upgrade worked.
Since there are a lot of threads about this upgrade and most are getting long, I thought I would make a new one with this warning. If you are using the default 1GB card, the update will most likely fail. This should not stop you from getting the automatic updates though because those are not saved on the SD card.