Check out this video of startup Swype demoing their new touchscreen typing system. Point at the first letter, and "connect the dots" to each subsequent letter.
The glorious moment in this video is when the guy effortlessly spells "Mississippi" in the space of one second.
Apparently this guy is the/a developer of T9 input as well. The guy knows his stuff, I'd say. The sooner this is present on touchscreen devices, the better.