Ooh, I like it..

Although maybe you could split the textblocks up into two rows of textblocks intead of the one row it is now. Makes for less use of the stick, which seems to be the only factor that slows things down as of yet..
You could then also add more characters to the ammount of inputabble characters..

Numbers, for example, which you could place on the far right side of the virtual keyboard.
Anyways, even if you stick to the one-rowed system you currently have, this could be fast enough to be the "standard" config editor (which, blasphemy!, the GP2x currently lacks. Sort of). You need to be able to move the cursor around to do that, though. I suggest doing that with the SELECT key, and using the volup/voldown buttons to change between character sets (or some other feature).
3x5 (4x6 if including whitespace) monospaced font would be nice (for reading ebooks, too! Damn them 80-characters-wide standards!)..