In normal use, this is a touchscreen device and it works best for stuff that does not need heavy text input. I tend to use the pen and the scrollwheel only for most tasks. This works well for web navigation and for e-book reading. MobiPocket has on-screen arrows for next and last page, and both MobiPocket and FBReader accept the scrollwheel for the same purpose. The scrollwheel is large and below the right hand keypad, and works just like a standard mouse scrollwheel. I find the direction pad on the left less useful, although it will also page flip e-books.
You are correct, though, that two-handed text heavy work needs another navigation method. CarryPad's
review made the same point. However, I don't know what kind of input device would work best. Two handed keypad operation is actually better for a small screen, if the input ergonomics could be sorted out.
For anything complicated I put the PP3 on a desk with a USB mouse and keyboard (bluetooth also available).