8Pen's input method comprises from four sectors with stacks of characters on each side. In the middle, the big black circle is the spacebar. You start each gesture from the spacebar, and then you circle around the 4 sectors depending if the character you want to reach is 1st or 2nd, or 3rd, or 4th. So to type "a", which is the first character in its stack, you only circle around its immediate sector, while to reach "r", which is 2nd in its character stack, you must circle around two sectors. Difficult to explain, but this video can make it clearer.
This is obviously a very innovative way of looking at typing, although there is a steep learning curve, mostly because the characters stack order is based on how much they're used in the English language. So for example, for "a", which is used a lot, it's just a 1-sector long gesture, while for the less-used "z", it's 4 sectors long. I believe that it's possible to learn this system in about 1-2 days if you work it. I learned where all the vowels are stacked within 10 minutes for example.
The system allows for custom gestures, so for example you can create your own quick gesture for whole words or sentences that you use a lot.
I worked with 8Pen since I bought it yesterday, but I can't imagine this system being able to get faster than actual typing. Actually, this is not entirely true. 8Pen can be faster than a soft keyboard, but only if the screen is smaller than 3.5". In that case, single-handed operations like 8Pen are possibly faster than the error-proneness of a tiny soft keyboard. But on larger screens, especially on 3.7"+ screens and for people with somewhat small fingers, Swype or a normal soft-keyboard are possibly faster than 8Pen. But this is for people who are after Guinness records to clarify for us. Overall, I'd say that 8Pen is faster than hand-writing, and much faster than Palm's Graffiti, and it holds a definite advantage in smaller screens.
The other advantage of 8Pen, that could prove major, is that it's blind-friendly. And not just for blind people, but also for users who can walk and type without looking at a screen. A lot of youngsters were able to do that with T9 back in the day, and it's certainly possible with 8Pen, while it's not as easy with any other touch system. The jury is still out on BlindType, since there's no available version for it yet, but also BlindType doesn't seem to be as friendly typing both blind and with a single hand -- something that's possible with the 8Pen. Only thing missing from 8Pen is vibration when the finger touches the "spacebar" circle, so we get a clue as to where the starting point is.
So what to use? I think that all these systems have their place. Soft keyboard if you're not keen to learn new things or your fingers are small enough, Swype and BlindType if you're after speed and flexibility, and 8Pen if you're working on a small screen and you're interested in single-hand blind-typing.