Just upgraded to cm-4.2.1 it looks like that everything is working super
even the mpd client pmix works fine.  I hope that the music player bug is fixed
now its was starting to annoy me but we wil see

Links:
Cyanogenmod
pmix

Just installed CyanogenMod 4.1.999 and its all working perfect
all the google apps work and it looks like my phone is going faster
you can find the installation manual here:
http://forum.xda-developers.com/showthread.php?t=567610
Or
http://www.simplehelp.net/2009/10/04/how-to-install-cyanogenmod-4-1-99-on-your-g1-android-phone/