Touching non-interactive space between buttons is throwing off typing
The most frustrating part of squeekboard typing experience for me right now is that sometimes while typing I happen to hit the empty space between the buttons. My mind expects either the correct or some neighboring (typo) letter to pop up, which would be fine - however, when nothing pops up, I feel frustrated in a similar way like you would on a poor non-contacting touchscreen.
A possible solution for that would be, instead of testing whether the touch point is inside a particular button, to look for the closest one. I believe this (or not having any padding between buttons, which leads to the same result) is how other mobile OSKs (Android, iOS, Illume) use to work.