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The Dasher project ( http://www.inference.phy.cam.ac.uk/dasher/ ) is similar but different again - between the two they may be on to something.
Cool, thanks. I've tried Dasher before and did not get the hang of it. Swype looks better but I won't be truly sold until really trying it obviously. Like with predictive text entry on phones etc., the problem of deciding between two perfectly valid "guesses" based on context seems like a hard problem.

(btw, no, I have nothing to do with this company!)