At least for me, physical keyboards are still better than virtual keyboards. When I used a Nokia N97 or HTC Desire Z, I never had to use autocorrect. When I first got a Samsung Galaxy S3, I struggled to type for 6 months. I eventually had to turn on auto-correct in order to type with any reasonable degree of accuracy.
Not being able to feel around for which key I'm about to press is a main contributer to my typing woes. Auto-correct only masks the problem of pressing the wrong key. I'm still pressing the wrong key on practically every single word. As good as the auto-correct and text prediction is, there are still many, many types of errors where auto-correct fails to fix. For example, if you accidentally press the space bar instead of a letter, auto-correct willl not be able to fix. Pressing the shift key or a number key also causes problems that auto-correct cannot fix. I've tried with multiple keyboards with auto-correct turned on and none can give me a degree of typing accuracy as good as a physical keyboard without autocorrect.
Another problem I found with virtual keyboards is that you generally don't know you typed the wrong key unless you look at what you had typed. When using a physical keyboard, I found I am able to easily tell if I pressed the wrong key because of the tactile feedback. This allows me to quickly identify mistakes and correct them. When typing on a virutal keyboard, it may be a many words later before I realised I made an error because I have to look at the key I am trying to press. I may not look at what I'm typing until many words later. I have tried to type without looking at the keys. I'm just not skilled enough to do that.
Virtual keyboard do have an advantage in that keyboards that support gesture typing make it easy to type with only one hand. When my phone is mounted in my car, I am unable to slide a landscape slider keyboard out to type. Also, my phone is mounted in portrait orientation. Gester typing keyboards like Swype allow me to type a destination in my mapping app or type in any other situation where I only have access to one hand.
The biggest problem I have with modern landscape slider keyboards (I don't like the portrait ones like on the BlackBerrys) is that they are all attached to crappy phones. What I find so insulting from phone manufacturers is that they put physical keyboards on crappy phones and then claim no one is buying them. It's not that no one is buying keyboards. It's that no one is buying crappy phones. Then they use this to justify no putting any effort in making a good phone with a landscape slider keyboard.
I'm not opposed to advancements in technology. Touch screen keyboards are not an advancement in text input over physical keyboards. I have yet to be able to type on a virtual keyboard as well as on a physical keyboard and I have been trying for almost 2 years now. Virtual keyboards to me are merely tolerable. Auto-correct technology has helped people type on virtual keyboards, but if you look add the same technology to physical keyboards, physical keyboards are still better than physical keyboards.
