I love my phone. One of the key features that I wanted from my old phone and never was very satisfied with was mp3 playback. The old phone had an absolutely horrible player. Bad interface combined with randomly deciding not to play some mp3's made it a toy rather than a real music player. Basically, they slapped together some attempt at a music player in order to put another check mark on the spec sheet, but didn't really care if it actually worked.
So the G1 actually has a real mp3 player with working playlists and sorting capabilities and whatnot, which means that I've been spending more time listening to music on it - I've even been using it at work a fair amount in addition to listening on the bus. I'm considering getting nicer earbuds than the ones that came with, but that's a pretty low spending priority so I haven't gotten around to it yet.
I signed up with last.fm a few years ago when I was listening to a lot of music on my home computer. But as my listening habits changed, I wasn't scrobbling nearly as much. However, the 61 started scrobbling lately. I haven't been listening on that site nearly as much the last few months, and it's weird because I usually use it more as music discovery which throws in a lot of random songs that I don't even like. But today I found a scrobbling plugin for my phone, which means that the songs I actually like will get picked up on last.fm again. I'm working on getting my phone hooked up to my car (I'll explain that problem later) and then pretty much all the music that I listen to will get recorded, piped through last.fm, and show up on my sidebar.