The early T-Mobile G2 buyers are finding that there is a microchip embedded into the handset which prevents device owners from making permanent changes that allow custom modifications to the the Android operating system.
It seems that a hardware rootkit restricts any modifications to a device owned by the user which limits the use of the phone in anyway that the manufacturer does not like. If you install anything dodgy, or even not recognised by the powers that be, the phone is capable of overriding your software changes and reinstalling the original firmware.
This is not so hot for those who have bought their android-powered phones to tinker. There is already a 50 page thread over at xda developers who are not happy bunnies. The G2 is on pause at the moment because there is not enough available. Some are thinking that this will give some hacker time to kill off the DRM when the phone becomes available again.
Hardware rootkit under the bonnet
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