I simply love the iPhone, but typing on it sucks..
I used to think that with mine but it eventually came down to trusting the auto correct feature.
Did you know that the keyboard will make the touchable area of the next assumed letter bigger if there is no other letter near that next letter.
Take the word "right" If you type r-i-g-h the letter T's touchable area will be larger because its the next logical letter. So once you start trusting those little features you will become a pretty effective typist on the phone. I use my thumbs now and im blazing now.
I find I can type quite rapidly on my iPhone... and find myself missing the smart word completion built into the iPhone when I am typing on my Mac/PC. Once you learn to trust the software, you'll find very few errors and very fast typing.