iPhone keyboard has one cool feature. As you type, it calculates probabilities of next letter based on dictionary and increase target area based on such probabilities. So if for example if it is more likely that next letter is "A" the touch area for "A" key would become bigger and more difficult to miss. You can see this feature explained in this video from Apple:
http://www.youtube.com/watch?v=a-9UggQV9BM
(Watch around 2:43 timestamp).
Also see this Quora question http://goo.gl/xA9a2 for some additional discussion.
(was added in version 2.8.0)