I think what brihogan was getting at is the recognition of the OPTION+key combinations whic h iOS natively converts into special characters. See here: These are the qwerty keys pressed with option. œ∑´®†¥

For instance perhaps option+I, option+J, option+K, option+L (ˆ∆˚¬) could be used to move the cursor (but obviously would be useless with the presence of arrow keys on a bluetooth keyboard)
Or is it that there is no way to *intercept* these keys? If they just simply get inserted. Could still retroactively search the most recent typed character and match the value with the key!

I have seen several VNC clients now that are able to issue the proper key press using the Ctrl and Alt keys from the bluetooth keyboard to the host machine. Remoter is an example of such an app.

This means it is possible in theory to make custom shortcuts!!

I agree with this. I think a simple bunching together of [A-Za-z] characters would speed up the undo functionality quite a bit: It does not need to be as sophisticated as other IDEs have it, what's important now is to get the efficiency a little better. 

While page-up and page-down are not necessary with typical touchscreen interaction (the wonderful iOS scrolling takes care of it), they are definitely necessary for me when I use a bluetooth keyboard. I just got the new Adonit Writer for my iPad3 and Textastic seems to work great with it so far (Command+Z as undo works!!). I was just disappointed to find that Control+Up/Down and Command+Up/Down both the cursor to the beginning/end of the entire document. Could you make a quick update to address this? Preferably Control+Up = page-up and Control+Down = page-down. 

i think making the functionality such that pressing tab chooses the first option would be really good. I don't have a keyboard for my ipad yet (waiting to new Adonit Writer) but i bet if the only way to choose one of the choices is to touch the screen i'm definitely just going to finish typing the whole thing anyway. in fact that is what happens most of the time for me with Eclipse. So in summary, completion list is way better than no completion list, and allowing the pressing of a key to select from the list is even better.