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I don't think there's any way to really disable it, but if you refuse to accept it's suggestion, it will stop suggesting it.
 
yeah, the only way to do it now is to jailbreak, get bostool and download the addon to turn it off
 
if you have a jailbroken ipod there are a couple of solutions via cydia, I currently have a addon for bossprefs which lets me turn auto correct on or off
 
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