It was reported a few days ago that Rogers would be allowing HTC Dream owners the chance to upgrade to an HTC Magic due to the fact that the Dream would not get an OS update past it’s current iteration of 1.5.  This was great news but the details were scarce at the time and there was uncertainty in the terms.  It is now being reported that the offer does include a free upgrade, but with a small catch.  Customers who opt for the upgrade will automatically have their contract renewed for the Canadian standard of 3 years, which turns out to be about a 7 month extension for most Dream owners.  Hit the jump for the complete terms and conditions of this offer as well as a look at the key features customers can expect when they upgrade from 1.5 to 2.1.

[via MobileSyrup]

Exact terms and conditions are as follows:

• Current Rogers customers who activated a new Rogers HTC Dream through Dec. 31, 2009 – either through upgrade or a new activation – may upgrade that device to an HTC Magic for a limited time.
• Upgrades must be done through Customer Care (1-888-Rogers1) or through Rogers.com (existing 3yr data plan required for online upgrades, instructions below). This special upgrade offer does not apply at retail.
• This limited-time upgrade is available between January 12 and January 26 only.
• The $79 upgrade cost of the device, plus the $35 administration fee are being waived. Customers who choose to take advantage of this offer get a $599 phone for $0 with the renewal of a three-year term from the date of the upgrade
• The upgrade is completely optional. Customers who choose to can stick with their HTC Dreams and remain in their current contracts

It has also been confirmed by a Rogers customer who has already gone through the upgrade process that Rogers will allow customers to keep their HTC Dream.  For all of you on the fence about whether the lack of a physical keyboard is worth the upgrade to 2.1, here is a list of key features that are included in Android 1.6 to 2.1 that Dream users are currently and will be missing out on:

• An improved Android Market experience.
• An integrated camera, camcorder, and gallery interface.
• Gallery now enables users to select multiple photos for deletion.
• Updated Voice Search, with faster response and deeper integration with native applications, including the ability to dial contacts.
• Updated search experience to allow searching bookmarks, history, contacts, and the web from the home screen.
• Updated Technology support for CDMA/EVDO, 802.1x VPN, Gestures, and a Text-to-speech engine
• Speed improvements for searching, the camera.
• Optimized hardware speed
• Support for more screen sizes and resolutions
• Revamped UI
• New browser UI and HTML5 support
• New contact lists
• Better white/black ratio for backgrounds
• Improved Google Maps 3.1.2
• Microsoft Exchange support
• Built in flash support for Camera
• Digital Zoom
• Improved virtual keyboard
• Bluetooth 2.1

If you plan to upgrade let us know how your experience goes with the Rogers customer service team and enjoy the new features that will be upon you soon!