Yeah, text editing on tiny screen keyboard sucks. I could never really make the transition myself, so I keep bringing my Thinkpads with me (guess why Thinkpads too :)).
As phones are so big these days they require two hands anyway, I reminiscence of Palm Pre/webOS hold-below-the-screen-and-swipe-left-and-right to select exactly the right spot quickly and precisely. I don't remember the rest of the gestures, but at least I don't remember it being as frustrating as Android.
Nokia N9 (Maemo/Meego) also had a few interesting things, as did Ubuntu Touch.
I applaud any research into this though I can't imagine how it will ever beat physical keyboards (other than mind-reading).
