I have been looking for a keyboard for my droid for a while – I have had some success with my “fat fingers” issue but not a great response. For info I have a google nexus one that is my main phone and a HTC desire on orange in the UK.
I came across the lifehacker link below and followed into research into the swipeIT keyboard. It really has sorted my issue.
Shapewriter is mentioned in various places and feedback comments as an alternative but I could not find it in the Marketplace and the Shapewriter site link to it does not work. So I have now purchased the SlideIt keyboard which has a large demo time.
This is the video on what you can do with the slideIT keyboard.