With a custom layout file, you can create virtual keyboard that has arrow keys, among other things. There have been many discussions here and many people have created different versions of VKBs with arrow keys. Here are some links:

http://talk.maemo.org/showthread.php?t=88453
http://talk.maemo.org/showthread.php?t=79492

I have created some as well:
http://talk.maemo.org/showpost.php?p...1&postcount=27
http://talk.maemo.org/showpost.php?p...6&postcount=28

So you can use one of those or create/modify one by yourself. The layout files are just XML, so with a little study it is not difficult to tweak your own favorite VKB layout.