As promised, custom ROM builder Cyanogen has delivered an unofficial firmware with speed enhancements, system and app backups to SD cards, and a few other great tweaks — without the copied Google apps that caused a cease and desist last time around.
It's definitely a bit more tricky to install this time around — you'll need to install Recovery Flasher for root access, then install an HTC developer's build, then install CyanogenROM, and finally run two quick terminal commands.
Luckily, the Simple Help blog has a step by step, screenshot-stuffed walkthrough of the install process for a G1 phone, and commenters suggest it can be pulled off just as easily on an HTC Magic (holding Menu to bring up a soft keyboard when needed). As always, back up your phone before blazing forward, and know that you're in murky territory when it comes to warranties and tech support. That said, tell us what you like, and any tips you've got, about this build in the comments.