Google has finally agree to drop the ETF from $350 to $150 for the Nexus One device, they finally realized that asking for $350 is giving a lot of its buyers a second thought about getting the phone.  See the following statements from google website.

You agree to pay Google an equipment subsidy recovery fee (the "Equipment Recovery Fee") in the event you cancel or downgrade your wireless plan within 120 days of activation of wireless service. If you activate a new line of service with T-Mobile, your Equipment Recovery Fee will be $150 USD if you cancel or downgrade your service plan within 120 days of activation. If you are upgrading an existing line of service with T-Mobile, your Equipment Recovery Fee will be $50 USD if you cancel or downgrade your service within 120 days of activation. You authorize Google to charge the applicable Equipment Recovery Fee directly to the credit card or other payment method used to purchase the Nexus handheld device upon cancellation or downgrade of your wireless plan. You will not be charged the Equipment Recovery Fee if you return your Nexus handheld device to Google within the 14 day Return Policy period as set forth below.

Read the complete term of use here.