I just got rid of my Iphone and switched to a Palm 800w because of the keyboard issue.
I am sorry to say that I can't type while driving on the iPhone, but I am able to do it on the 800w. I am able to feel the keys on the 800w to easily type without having to glance over so much.
If they can make it somehow where I can feel the keys on the iPhone I will switch back.
It is too dangerous having to glace at the screen to be able to type on the iPhone while driving.
iPhone 2.0: Part One, A Physical Keyboard