Wow, somebody got it right! Swype, in beta for Android phones, is such a quantum leap beyond the Android keyboard -- physical or "soft" -- such a huge step over Blackberry keyboards, worlds better than my old Palm's learn-a-new-alphabet letter recognition.
Rather than typing out letters one at a time, swype has you trace a finger around the soft keyboard to spell out the word. It uses continuous dictionary lookup to figure out what word you're really typing. Something the soft keyboard on Android should do -- and almost does, by showing possible words on the top, none of which are what I'm actually using.
Is it perfect? No. It occasionally comes up with the wrong word, or gives me a choice of eight words none of which are right, but it's accurate much more frequently than the standard soft keyboard, and much, much faster. It may be sucking battery power more than my already-thirsty phone does (something likely to improve with the release version, I'd hope). But I swyped several emails yesterday while waiting for my plane, things I'd only have done with the slider keyboard on my Moto Droid previously.
It looks like support for it within apps depends partly on the app: most of the Android apps integrate with it beautifully. A couple times, I couldn't get it to appear in landscape mode, but I haven't put my finger on it yet. The one app it doesn't seem to support at all is "Twisty" -- an interactive fiction interpreter for playing "Adventure" and the old Infocom-type text adventures.
But this is an app that's staying on my phone, and I'll probably pay for it if I have to when the beta is up.