Swipe!

Spotted on 37signals

http://www.37signals.com/svn/posts/1240-swype-keyboard-for-touchscreens

A new input method by one of the creators of the T9 Predictive Text input system.

Brief usage rundown:

• Display graphical keyboard on screen
  
• Instead of punching out individual letters, just put your pen down, drag (roughly) over the letters you want to type
• Lift your pen up
  
• The word automagically appears

Incredibly simple. Not the obvious solution. In my mind, the "logical" progression from T9 on a full keyboard would be the iPhone solution, where you type out the text roughly and then it tries to guess what you type.

I would imagine an input system like this would increase the iPhone's usability infinitely, especially in portrait mode where the keys are incredibly skinny.