Google Nexus One is the first Android phone that includes live wallpapers. This phone runs on the Android 2.1 OS. HTC Hero, Motorola Droid users will have to wait for the Android 2.1 software update to get the live wallpapers feature.
But the wait for HTC Hero is over. A developer at xda-developers forums has released CKDroid ROM for Hero (GSM version) which is based on Android 2.1 and includes live wallpapers.

The ROM is very stable with only a few apps not working, which I’m sure the developer will be able to iron out the bugs.
So grab the CKDroid ROM and get live wallpapers on HTC Hero.