Keyboard is fine for the bonus is screen size, but you have to concede that touch typing is thrown out the window, as you must look at the keyboard and screen constantly for all but one button press.
I do wish, however, that we had at least two more hard buttons on the bottom; there is plenty of room. Imagine being able to assign that many more shortcuts to frequently used apps or speed dials: single click, double click or long press. It would expand the iPhone's usefulness exponentially. Not just shortcuts, but any time you needed a button to press in an app, you could use them instinctually, and not need to look at where you're pressing. This would really help with one-handed use, as well. I am specifically thinking about zooming in maps here, as I cannot zoom out with one hand.
And while we're at it, would it really kill us to have one little status light? We could see if we had any missed calls, texts or voicemails at a glance without having to pick up the phone and press a button.