If you were wondering how the on-screen keyboard works in Android 1.5 (aka Cupcake), the good folks over at the Android Developer's Blog have a great write up on soft keyboards and all its glory.

There are multiple ways for developers to implement soft keyboards in their applications: a basic pan and scan method that basically moves the target application around to accommodate for the soft keyboard, a resize method that resizes the application window so that all aspects are visible, and a fullscreen or extract method where the target application is left as is and the keyboard pops up to re-orient it (this is mainly for landscape inputs).

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If you're a developer, you can geek out with the details, code, etc over at the Android Developer's Blog. If you're just a regular old Android user, know that with a landscape keyboard, your fat fingers should have no problem typing on a soft keyboard.

[android developers blog]