My good friend is an avid txt'r on a BB, and also works at an at&t company store, so he's "in the biz". I challenged him to a typing test. (I've never owned a QWERTY phone before the iPhone) and after a long sentence (normal grammer, not txt grammer) it was a dead heat. He was pissed because I had less than 2 months on the iPhone, and he's been on a Blackberry for a long time. Needless to say, he was very impressed with the speed.
The learning curve is a little steep, but you'll get the hang of it.
2 things I noticed, and liked.
1) You have to trust the auto correct, and even if you make a mistake, just keep typing the word that you want, and the iPhone will get it about 95% of the time. Especially after it learns your style.
2) 'Tapping' is quicker than 'pressing'. In other words, if you are light on your fingers with tapping, it's physically quicker and easier than depressing a physical button. On the iPhone, you only have to make slight contact to get a response, vs. having to press a button all the way down. I know some people favor the tactile response of a button, but I prefer the speed and less physical requirement of a touch screen.