A report from New America claims that the G2 ships with an embedded microchip that prevents users from making any permanent changes to the Android software. Specifically, this chip will override any modifications by reinstalling the original firmware. As you can imagine, Android users are none too pleased about the presence of the rootkit, and the authors of the New America report say it goes against the open source nature of Android.
"This is the same Android that purposefully opened up its source code under the Apache License, allowing anyone to use, modify, and redistribute the operating system code even if they choose not to contribute back to the development community. Even among other Android computing devices and phones, the G2 is touted as an open platform. Unfortunately, the hardware in this device completely undermines this license by allowing mobile network providers to override end-user changes to the source code. Wireless network operators have deployed a hardware rootkit that restricts modifications to a device owned by the user. This would be akin to a computer sold with Microsoft Windows containing chip that prevented users from installing Linux or another operating system of their choice."
Of course, it won't take long for developers to come up with a workaround for the rootkit. In fact, Softpedia reports that the folks over on the XDA Developers forums have figured out a temporary solution for those looking to root their device. Though this root will be removed if you restart the phone, it shouldn't be too long before something more permanent is uncovered.