There is, in fact, a pen for the iToy.

Unlike the iPhone, the iPod Touch is sold in Japan.  Unlike the silly
westerners who insist upon finger-poking their iToys, the Japanese
immediately recognized the need for a pen, and stores in Japan all sell
the iPod Touch pen.  The cost is 1950 yen or US $20.  It is not at all
like a stylus; it has a spring-backed (for dragging) rubber tip at an
angle which puts about 1/8" diameter surface on the iPod Touch screen.

Handwriting recognition, or more accurately kanji recognition, is quite a
bit more important in Japan than in western countries.  It it MUCH faster
to draw a particular kanji than it is to enter it phonetically through a
keyboard, but the latter is the only thing that Apple currently offers for
its Japanese input method.  What's worse, Apple only offers an alphabetic
keyboard and not a kana keyboard, so even the phonetic characters require
twice as many keypresses to enter.  [To be far, some Japanese, especially
programmers, prefer alphabetic input over kana input.]

I tried drawing kanji using the Sketches application (one of the many
useful applications after jailbreaking an iToy) on my iPod Touch, and
determined that it was completely ridiculous to try with a finger.  With
the pen, it was a bit better, but it was quite slow and nearly impossible
to draw a character in the normal size that you do on a normal Japanese
PDA.  Kanji drawing requires precision, that requires a stylus; and a
stylus can't work on an iToy.

The pen definitely works better for input with Apple's keyboard (which
takes a ridiculously large amount of screen real estate to accomodate
fingers), although a stylus is faster.  However, fingers seem to work
better on the icons.

Now, to be fair, most phones (as opposed to PDAs) in Japan do not have
handwriting recognition, much less kanji recognition.  Text input in
normal phones is done on the numeric keypad, and typically the Japanese
language requires many more keystrokes than English.

However, keys provide one thing that the iToy does not even with a pen:
tactile feedback.  The user knows from the feel on his or her (I've seen
teenage girls text at a rate that I would not have considered possible)
fingers whether the input is correct without having to look at the screen.

Windows Mobile based smartphones have either a keyboard or a stylus; and
with the latter comes the possibility of handwritten kanji input and
recognition.

What's more, the Japanese phone makers have not been idle.  Sharp's 912SH
for SoftBank steals much of the iToy's thunder in the phone market, as it
has many of the iToy characteristics plus the facilities that the iToy
lacks but are essentially for any mobile phone in the Japanese market.
It even includes a 1seg digital TV tuner.

-- Mark --

http://panda.com/mrc
Democracy is two wolves and a sheep deciding what to eat for lunch.
Liberty is a well-armed sheep contesting the vote.