When I saw SameerH's post mentioning the onscreen keyboard, navigable by the d-pad, my immediate thought was that I hope that it is not going to be a QWERTY layout and that there is a potential to not be a slave to modelling the limitations of a physical device in software.
I could see a layout based upon the frequency of letters in English (a different layout could be made for other languages).
I remember using a few alternatives to Graffiti on my old Palm unit. One of which is myKDB ATOMIK already discussed on MobileRead
were the other Palm entry methods I used (still available!). Of these two Fitaly would be another alternate layout to consider.