Find the Best Way to Type With the Onscreen Keyboard
People seem to either love or hate the iPhone's onscreen keyboard. If you come from a device with a physical thumb-style keyboard such as a Blackberry, you may find the onscreen keyboard very challenging. Using two thumbs doesn't seem to work well for many people because it is too easy to thumb the wrong keys. A better approach for many people (and my personal method) is to hold the iPhone in one hand and type single fingered using the index finger of the other hand.
This does feel slower than some other mobile devices, especially at first. But it is often much more accurate than the two-fingered approach (even with Apple's auto-correct feature). Hopefully, Apple will introduce an auto-complete feature like Windows Mobile offers in a future iPhone version.
Also, remember that in Safari, you can type in landscape mode. In landscape mode, the keyboard is significantly wider and easier to use for two-thumbed typing. Again, we can hope that Apple will provide this in other applications in the future.