The touchpad is bad. On the Touch cover, it's that leather-like material that rubs up against the screen normally. On the Type cover, that part's fixed, but the whole thing is roughly the size of two US Quarters put together. The Surface really isn't big enough to have a properly-sized keyboard and touchpad attached.
If they hadn't wasted the top row of the keyboard on a bunch of charm buttons that absolutely aren't needed (they're all touch gestures you could do directly on the screen), and volume buttons (when the tablet has physical volume buttons inches away), they would've been able to almost double the surface area of the touchpad. I wish they had.
Its true that the touchpad on the touch cover isn't great, but on the other hand the _whole_device_ is a touchpad at the end of the day. For scrolling and zooming it quickly becomes very natural to touch the screen rather than the touchpad on the keybaord.
I agree, more space for the keyboard. Using a Trackpoint on a T400 was suboptimal, but very much improved from a standard windows touchpad and I would be happy settling with one on a Surface.