Apparently I missed this. It must have been very, very quiet, but Google released a new version of Google Maps for the Android smartphone platform (and hence, the T-Mobile G1). This version now includes walking and... GOOGLE TRANSIT!
This was the one thing I was missing on the phone. It's now perfect. *hugs his G1* Hurray!
BTW, you have to manually update your Maps application through the Android Market to get this update. Full story here.