I too had a blue screen the other day as i was trialing adhoc. But it seems to be a one off.
You can connect to wifi, meaning your Windows 7 can connect to your home wireless network?
Adhoc wireless network uses your wireless adapter so you cannot turn on adhoc and home wifi connection at once.
If you want to connect your G1 to your Windows 7 adhoc wireless to use the internet, your internet connection needs to be from a wired connection. Having both active, you can bridge the connections for internet.