I have come across a free new application for my iPod called '' 'shapes'. Essentially you have a soft keyboard on screen, but rather than tap the letters out one by one, you drag your finger across the keys and the programme predicts your word. It's very good but heavy on the US dictionary which is irritating if you're from the UK.
I am putting my money where my mouth is in writing the entire post by the programme, Ironically though the programme is free!
If you have the iPhone or iPod touch, try it, I think it is excellent.