T-Mobile began shipping the G1 Android today, the first production Android-based device and the carrier’s first full-touchscreen phone set to battle with iPhone. The product went on sale Tuesday evening in San Francisco, ahead of the start of sales across the U.S. The G1 was made by T-Mobile in collaboration with Google and Taiwan’s High-Tech Computer (HTC) and it was released at T-Mobile’s store on the city’s Market Street at 6 p.m. The launch attracted a queue of about 150 people. Rumors say that the pre-sells for the Android reached 1.5 million.

The cell phone has a full HTML web browser and it is tightly integrated with Google’s contact and e-mail services, including an internally-made version of Google Maps to take advantage of GPS. Another accessory is a built-in compass that gives users the ability to use Street View. Media playback is limited to a simple music player and a YouTube client. Furthermore, the device has built-in Amazon MP3 access to buy whole songs and albums on Wi-Fi, like Apple’s application store for iPhones. As for the touchscreen, it’s a 3.2-inch display that slides away from the main body of the phone in order to show a QWERTY keyboard. In addition, a trackball similar to the one used in RIM’s Blackberry is used for navigation. The operating system is provided by Google and it’s named exactly as the phone – Android.

The G1 will initially come in black and bronze colors, with white appearing shortly afterwards. Pricing for new customers is $180 when signing a two-year contract or $400 at full retail without a commitment. Each phone comes with a 1GB microSD card but supports up to 16GB microSDHC cards.