There have been some complaints about the stock Android virtual keyboard. Fortunately, there are a number of alternatives on the market. People raved about the HTC Hero keyboard, which can be installed on other Android phones (not via the Market), but I have heard it has issues with Android 1.6. I personally use the TouchPal, and really like it. I actually think I like it better than a physical keyboard–there are things a virtual keyboard can offer that a physical one can’t. Ability to get nice big compact QWERTY buttons when you want them being one, ability of the buttons to better tolerate a partial hit being another. Compact QWERTY is really nice–it makes the buttons useable in portrait mode. There is another one called Better Keyboard that has also received some good reviews.
UPDATE: I just did some research, and it looks like TouchPal is temporarily unavailable on the Android Market, but will be coming back, I think. So Better Keyboard is probably the best bet for now.
This brings another tip to mind–use a backup program to back up your apps. One reason for doing this is convenience. In the event you have to do a Master Reset, if you have a lot of apps, a Restore is far faster than re-installing them one-by-one. On top of that, you will restore your app configurations, a huge time-saver. Of course, for apps that store there own data, there is that eternal user concern to consider–namely, making sure you have your data backed up. Finally, if the app is pulled from the market for whatever reason–as TouchPal has been–this may be your only way to keep it (TouchPal was free, during its period of temporary availability, so there is no issue of breach of contract issue there, I guess.)