Android :: Can Phone Be Used For Games / Media Player Without A Carrier?

I'm very interested in purchasing an inexpensive used T-Mobile G1, for the purpose of running apps, playing media, reading PDFs, browsing the web, etc, and to do this over a wifi connection. I do not intend to use it as a phone or for using data on the go over networks like 3G. I simply want a cheaper alternative to the Ipod Touch, that is a cool little pocket computer that can do a lot of useful things. So my question, is how much functionality can be had with an Android phone, without actually signing on with a carrier? Can commercial apps be purchased and installed on it over wifi only but with no carrier?