I'm having the same problem. I can't find ANYWHERE where you can edit the list.
I found the same problem and what searching on Google tells me is that right now, it can't be done. What you can do is blow away all the custom words you've entered so far, if you have some typos in your custom dictionary. To do this, go to: Settings > Applications > Manage Applications > Touch Input > Clear data. That will blow away all the words you have saved so far. Really, not a great solution but at least it's something.
I can't help but think somebody will create an app to edit the dictionary or better yet, we will get an update to the OS that will allow this.
I'm not saying this is the definitive answer, but according to my searches, that's all I can find.....