I'm writing this on my iPod Touch, which is a tricky task thanks to the tiny little keyboard. There's no room for error with the size of fingers in relation to the small keys. It took me 10 times as long to type the last two sentences as it would on a normal keyboard. This is a hunt-and-pecker's dream come true.
My phone also has a tiny QWERTY keyboard, and it's also a ton of work, but not as much work as the keypad without individual letters. Those are brutal.
They ought to come out with a keyboard that has the same layout as an old lead type drawer. That'd be fun. The space for an E is two or three times the size of the others.