"Incidentally, this is also why the Dvorak keyboard layout is exactly the opposite of what you want in a highly ambiguous scenario; Dvorak places all the vowels adjacent to each other, significantly increasing ambiguity. Intuitively it rearranges word-space to put many common words right next to each other."
I suspected as much when it came to Swype; it's nice to see someone who has actually done the work verify this intuition. I use Dvorak on my physical keyboards, but I find it sort of... ironic, for lack of a better word... that the suboptimality of QWERTY is itself the key to how these alternate sloppy-keyboards work. It's sort of nice that my QWERTY skills don't entirely go to waste...