The well-designed physical keyboard is probably what most users of older BlackBerries love about the devices, so when they went soft in BB10 BlackBerry knew it had to do a good job. I think the company did very well.
As you type a word, the OS predicts what you intend to type and mixes suggestions into the keyboard as pictured here. You may then "flick" the suggestion up and it will show up in the field where you are typing. I've been using the phone less than a day and I'm definitely getting used to looking for the suggestions and flicking. It works. Other soft keyboards, especially the iOS keyboard, seem weak by comparison, although there are many 3rd party keyboards for Android which bring innovation like the BlackBerry soft keyboard.
It's not perfect. Perhaps it's early still, but so far in my experience, there are times when the predictions could be smarter. For instance, I've typed in my email address a dozen times already. You'd think that in an email field the software would know to suggest that one, especially after I start typing my name. Perhaps this will come in a software update.