This reminds me of Palm's Graffiti system used on the Palm Pilot range of PDAs [ http://en.wikipedia.org/wiki/Graffiti_(Palm_OS) ]. That system too used simple gestures that mimicked hand-writing.

Rather than training the system to learn how to decipher the user's input, it required the user to learn some basic gestures. The input speed may not have been as fast as the predictive touchscreen keyboards on iphone/android phones, but it was a pleasure to use and accuracy was second to none.