Most people have a hard time with typing stuff into an iPad as it is. While you can probably type easily with a concept like this, getting users to understand the chorded keyboard will be a major challenge. There are folks that don't even get swype and the dictionary keyboard. If you can get over that bump, the product has potential.

I would not hide the keyboard for any reason. It can confuse people pretty easily. If I try to click a button on a website and end up typing a character instead, it can drive me nuts.

Cool concept.