Man, this was a frustrating problem. This happened after I got a replacement watch.
Just open up Settings > Applications on your phone, choose Android Wear, then Clear Cache (not Clear Data).
Then, restart your watch.
Worked for me. Finally!
Really? I'm not seeing this at all. I do miss the punctuation bar (which is now hidden inside one key at the bottom) but I've noticed that the stock keyboard is incredible responsive. There is zero lag when you touch a key and I'm so much faster now when typing. I hate to say it, but is just as...
Very nice. You guys are awesome. Count me in :-)
And thanks again for the great reviews and product info. You're now my main Android news site, hands down.