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I played with one at best buy since I was there and I made 3 typos just trying to type in a web address.
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I had a similar experience. Virtual keyboards really suck in general IMO, and wrt to the iPad, I think it's almost worse having it larger- the lack of physical keys is easier to deal with when you're just poking with your thumbs because your hands are anchored relative to the keyboard (to the sides of the phone). That's not the case with the iPad, and it makes it an absolute nightmare to type on.
Of course, it's Apple's new shiney, so you know there are going to be a million or five that will do whatever is required of them by Apple to own the fashion statement, and will claim whatever disadvantages or limitations the device places on them don't matter, or are actually advantages (I've read reviews that claimed the lack of multitasking is actually a plus, for gawd's sake).