(This suggestion assumes you know how to backup your phone's system, load alternate versions of android on your phone, then wipe and restore a previous system from backups. For more info on that, look here)
If you want to have a look at what a "live" wallpaper looks like on your HTC Magic, load this alpha port of Android 2.1 to Magic 32B phones. It includes *one*....proof of concept....and it's fairly boring (touch-sensitive spinning cube behind the icons on the Home screen)....but cool to see on YOUR screen.
Lots of stuff doesn't work in this ROM (camera, bluetooth), but the 3G goes and the wifi. Didn't try the GPS or the phone. ;-)
You don't do the sign-up at boot. You "skip" it, then run the Market after and sign-up that way. Several of the Android 2.1 ROMs are like this. It's early days for most of them.