When keyboard is in landscape position and fullscreen keyboard is turned off, theres no pointer or how should i say, the thing when you once click on the text and pops-up, so you can select or move to a letter more easyly and then you can copy/cut text for example, i dont know if you know what i mean, but this works in horizontal mode and landscape mode (fullscreen keyboard turned on), but not when its turned off.
This is the only picture i found that will show you what i mean, if you dont know (picture is not from Smart Keyboard, but i hope you will know what i'm talking about).
You can check it yourself, that it doesnt work in -> MSN Messenger: Mercury, but if it's hard to fix i understand it wont be fixed soon or later 