I notice the stock touch experience is a bit off for my nimble thumbs so I re-calibrated the portrait keyboard and now I get a much better response on those edge key presses.
As for it not working in Portrait mode, the HTC Hero with the Sense UI doesn't do a lot of native Android things in Landscape mode. The homescreens, People App, Calculator, Calendar, Clock, Footprints, Music, Phone, and Weather apps do not do landscape mode on the Android 1.5 Hero.
Also, everyone says another good thing to do besides re-calibrating the touchpad for your experience is to re-calibrate the G-Sensor as well since it has a placebo effect of making apps that do rotate to landscape a bit snappier.