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The digitizer runs around $40. If HTC doesn't help you, here's a guide on how to disassemble an HTC G1. Maybe a tech savy friend can do it for you. If you want to pay to have a service do it for you there are third partyHTC Repair Services.
Cracked LCD screens are very common.They're just by nature,easy to crack. I would say,if your screen is usable ,and not particulary irritating,then just leave it as it is.But if you want a new screen and you want to know about repairing it, I can help you.
I think once its cracked thats it to be honest, you might be able to go along to your phone provider and if its on contract you might be able to get them fix it up for free or at least a less charge than buying a new one!