I've got to say, I'm in the same boat since I upgraded to the latest rev of OS2008. My Stowaway worked ok before, but with this latest upgrade, I've run into this problem with the predictive text popping up and then the virtual keyboard is dead.

I've turned off the predictive text as noted above, and so far no "abc" bar popup. Now, I'm going to disable my Stowaway and finish this note using the virtual keyboard.

And I'm typing this with the Vkeyboard.

Ok, I'm back on the Stowaway, and it's working just fine. I didn't even have to disconnect.

Based on my experience, I'd say that turning off the predictive text fixes this problem. I'll write back more if I find otherwise in the coming days...

Thanks for the tip!!!