By Scott Moritz

NEW YORK – A brief hands-on experience with the Google (GOOG) G1 phone gives the impression that after a slew of touchscreen duds from other telcos, Apple’s (AAPL) iPhone finally has a worthy rival.

The highly-anticipated HTC phone for T-Mobile (DT) was unveiled in New York Tuesday, and kiosks with technical experts were set up so media people could run the first Android-powered phone through some tricks. T-Mobile will start selling the phone Oct. 22 for $179 with a two-year contract.

The G1 has a large touchscreen, nearly the same size as the iPhone. But unlike the iPhone, there is a physical keyboard under the slide-open screen. People familiar with the iPhone will find the G1 a little lighter and thicker. The G1, for you ultra-thin fans, is about 3/4 of an inch thick, downright portly compared to the svelte half-inch iPhone.

Navigating the screen is fairly easy and there are several ways to move around. The touchscreen has a swipe capability that allows you to flick up and down or side to side. There is also a small trackball-type button at the bottom of the phone for scrolling.

The 3G network coverage at the show – only 16 cities currently have T-Mobile’s 3G networks – was fast. Google’s homepage loaded in five seconds and Google search results also popped up in five seconds. Sites like CNNMoney and Fortune took about 17 seconds to load. That is a fairly standard 3G speed.

Calls worked, and the sound was clear, for those considering the device as a phone primarily.

It is clear, however, that with Google’s support, Android and HTC have made a solid Internet device that combines web access with technology like GPS and software like Google Maps. Applications like Compass Mode, as Fortune’s Philip Elmer-Dewitt explains, gives you a 360-degree street view, a trick that has been limited to PCs until now.

The phone has so-called push e-mail through its Gmail service. As Fortune reported Monday, T-Mobile was considering a low-tier price plan that would give G1 users free e-mail without a data plan. T-Mobile technology chief Cole Brodman says the company looked at a few different pricing plans, but decided that the e-mail only data plan “doesn’t do the device justice.”

The G1 will have two monthly price options, $25 for data plan limited to 400 text messages or $35 for unlimited data. That’s compares with AT&T’s $30 and $45 data plans for the iPhone.

HTC’s touchscreen has some familiar features, like a shifting orientation if the user tips the phone on its side. It also has a zoom-in function that is done with plus and minus buttons on the screen rather than the two finger pinch or separate approach on the iPhone.

The G1 allows dragging and dropping of pictures and text, a feature the iPhone still lacks. The music player was easy to use and there is a direct link to Amazon’s music store.

Overall, and first impressions being what they are,  the G1 stands well above disappointing touchscreens like Verizon’s (VZ) LG Voyager or Sprint’s (S) Samsung Instinct. And until Research in Motion (RIMM) delivers its touchscreen Storm BlackBerry, T-Mobile’s G1 is the toughest competition yet to the iconic iPhone.

By Michael V. Copeland

Sun Microsystems is acquiring open-source database company MySQL in a deal worth $1 billion, Sun announced Wednesday.

MySQL CEO Marten Mickos has told me in the past of his intention to take the Swedish company public. He even rebuffed a 2006 offer by Oracle for the company. In recent months, the volume on the chatter about a looming MySQL IPO was increasing, and you can bet Sun (JAVA) heard it as well. Given the size of the offer, and the current state of the public markets, it’s no surprise MySQL brass and its board finally decided to be acquired.

“This type of transaction is very comparable to an IPO,” says Kevin Harvey, a partner at Benchmark Capital and chairman of the MySQL board. “Our intention was to take MySQL public until Sun changed our minds. From a MySQL shareholder perspective it was a fantastic outcome.”

So who are the big winners here? Clearly Sun, which now adds one of the most respected and largest open-source companies to its software arsenal, which, by the way, it needs to squeeze more revenue from. From a Sun shareholder perspective, though, the price it paid is steep and has already set some analysts to grumbling. The other big winner is Harvey and his firm. Benchmark Capital, one of the earliest investors in MySQL, holds a 26% stake now worth more than $200 million. The other early venture investors include Balderton Capital, Index Ventures and Institutional Venture Partners.

The losers include competing opens-source database company PostgreSQL, for which Sun has been selling support services. And then there is Oracle (ORCL). The leading database company can’t be happy about this outcome. MySQL in general is not directly competitive with the top end of Oracle’s database products, but at the low-end there is competition for customers.

But rather than face a blood bath with Sun over the database business, it’s likely some cooperative relationship can be fashioned, much in the same way that Oracle and IBM (IBM) cooperate in the database business.