Hi - Welcome to the Android Community.
Applications, in general, can't do anything to your phone that could cause this to happen unless you or someone else has rooted your phone (the act of getting super use access, which bypasses Androids protection against malicious apps, usually so that you can install custom ROMs like Cyanogen's ROM).
There have been some notable exceptions, like the One Click Root app, but this used a bug in the BlueTooth code which I believe is now patched.
For most people, when they install an app in only has access to its own folder, and not any system files or anything that would stop your phone from booting past the G1 logo. Apps can slow down the startup of your phone (once it gets to the starting Android screen after the G1 screen), especially if they crash, but only for a few minutes. Eventually the phone would boot if this were the case.
Also, you seem to have wiped your phone, in which case it can't be any app you've installed (unless you're rooted, of course).
As your phone is stuck on the G1 screen, this means it's either a ROM issue (have you installed a custom ROM?) or a hardware issue.
If you let us know the name of the app you installed, we can check the reviews of it. An app that breaks your phone would either have no reviews, or a bunch of very negative ones.
Given you can get to the screen where you press ALT+W, this means your phone may well be OK and you may just need to reflash your ROM. There are a bunch of guys on here who are very good at helping people in your situation. Unfortunately, I don't know much about the reflashing ROMs side of things.
