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The version of Swype pre-loaded on most Gingerbread Galaxy S's does have arrow keys built in. Swipe your finger across from the Swype button in the bottom left corner of the keyboard to the SYM button alongside it, and you should see the cursor control screen instead. Just tap the ABC button to get back to the normal keyboard. (the other useful extra ...

Following keyboard apps have arrow keys: Hacker's Keyboard Go Keyboard with its Pad Plugin Simply install them. Hacker's Keyboard is not liked on smartphones due to its small buttons, but as you are on tablet, I'd recommend it to you. It has all keys found on a PC's physical keyboard (including even Control, Alt etc keys). Take a look of it: Use Go ...

This depends on the phone you're using, on my Spica, for example, I can use the directional keypad to adjust the position of the cursor. On phones that have trackballs, the trackball does the same job. Otherwise, the backspace key can be used as a workaround for left-arrow key (delete a few chars, then retype the word you're inserting and retype the deleted ...

In Froyo and later, there is a "cursor handle" that you can grab and drag to the right location. Now this photo doesnt show it, but the actual cursor is still there blinking too. that handle will also bring up a quick action menu to select text or paste. and once text is selected, you can copy and cut too.

If you use swype you can move the cursor by swyping from the swype symbol to the SYM key. That brings up a screen where you can do easy cursor movements and text selection. Also, you can correct words easily by double-tapping on a word; this will bring up the word choice box.

Providing this as an answer for those who don't want to install a custom ROM and want something close to the stock soft keyboard. I installed Anysoft Keyboard (found it on this question). The android market doesn't have the current screenshots, but here's one that shows the small left/right arrows at the top of the keyboard: