Originally Posted by mhotovec

If you haven't already, run the calibration tool on the keyboard. That allows it to learn the way that YOU press the keys, rather than the way some programmer thought you would.
On the home screen press and hold the menu button until the keyboard pops up (or anywhere there is a keyboard).
Press the 'gear' button on the lower left of the keyboard.
Text Input
Calibration tool.
Type in the sentence it gives you (the ever popular 'quick red fox').
My wife and I both saw an immediate difference in the accuracy of our key presses (or rather, the phones accuracy in determining what key we're trying to press).

Personally, I think the word prediction just gets in the way, so I've turned that off - which is also under the 'gear' settings.

Hope that helps.