This (long) thread has a lot of info on PSfreedom for the HTC Dream (G1)
[G1/32B] PSFreedom (v3 08/10/2010, hermes v3 payload) - xda-developers
You can also install a custom kernel and specify your own payload if you are using certain roms.
I havent used my dream for a while so I am a bit behind on it, so maybe someone will be able to point you to a specific post / link, but the info will be in that post I imagine if you have the time to read it :eek:
Make sure you butter the non reflective side of your CD's / DVD's and Blu-Rays so that when you drop them, they land butter side down thus preventing scratches.