I just made the jump to the Droid from a Samsung Omnia on WM 6.5. Since that phone has no hard keyboard, we all tried lots of different soft keyboards to find one that seemed to work best. For me, that ended up being TouchPal, from Cootek. You could flip between qwerty, T9, and phonepad layouts with a left or right swipe, and the predictive text really worked well because it automatically added new words to its dictionary the first time you used them. You could also save longer phrases like email addresses, and insert them easily into your text.
But the best part was a button that brought up a special editing keyboard. It has a dpad in the center, surrounded by keys for selecting, cutting, pasting, etc. It even has a 'deletet forward' key, in addition to the 'destructive backspace' key we have on the Droid. This editing keyboard completely eliminates the problems mentioned in this thread.
I don't mention this just to tease you: Cootek is doing an Android port, and already offered a free beta on the Market site that's now gone in anticipation of a real release. I've been using the beta (if you look around it can still be found), but the beta doesn't have some of the best features yet, like the editing mode.
So keep your eyes out for TouchPal when it's released, and maybe drop feedback to Cootek if you're interested... maybe it'll prod them to get the product done for Android faster. I know that I'd be able to type and edit much faster if I still had it!