Saw an updated message on Onion's blog:

Update 15.10.2010:
Using desktop mode makes using wine much nicer and keyboard input works too. Running winecfg is a bit problematic as it won't fit the screen properly but editing ~/.wine/user.reg and adding the following lines in the end enables desktop mode:

[Software\\Wine\\Explorer] 1287126526
"Desktop"="Default"

[Software\\Wine\\Explorer\\Desktops] 1287126530
"Default"="800x480"