Finally HTC has provided the official software update and it is available here. Please go through the page and the software upgrade should be easy. One things that I faced was that I had setup the USB device into mass storage mode, one needs to set in debug mode. Select Settings->Applications->Development->USB Debugging. This option should be enabled and then the phone will be visible to adb and fastboot.
Another issue that has cropped up with this software upgrade is the fact that to start with Google Latitude is disabled. It seems it is just a software option and can be very easily enabled by using instructions here.
1) Connect your Rooted G1 to your PC via USB and run 'adb shell' (or use the G1 Terminal App no the phone)
3) cd /data/data/com.android.providers.settings/databases
4) sqlite3 settings.db
5) .dump gservices (to see all your current settings and check if maps_enable_friend_finder already exists)
6) INSERT INTO "gservices" (name,value) VALUES('maps_enable_friend_finder','1');
Now the Join Latitude button will be shown in Maps again, no need for a reboot.
If it doesn't appear make sure you have the values
<boolean name="FF_SHOWN" value="true" />
<boolean name="SHOW_MY_FRIENDS" value="true" />
in the file /data/data/com.google.android.apps.maps/shared_prefs/com.google.android.maps.MapsActivity.xml
Hope that helps.