i concur with lex, i've never had this problem despite installing multiple apps on the watch. in your posts you mentioned that the error message first came up when you tried switching from alpha to numeric. and again the message comes up when you touched a key in the lower left. coincidentally, both areas you touched are on the lower left portion of the screen. there might be something wrong with your device/screen. unless of course another app is somehow causing this issue? though somewhat related, i once installed usb toggle in my note 2. though rooted, it seems that my note didn't like the app and frequently crashed. i had to fix it up it to the point of going to the bootloader to wipe out the cache. in any case, uninstalled it and now my note functions well. the same could be for your watch. again, unless of course there's something wrong with your screen/device...in which case you should have the watch replaced.
at first in setting up my wifi connection, playstore id/password, etc..it was quite a burden. though the keyboard is small, you'll eventually get the hang of it. i still get the occassional mistake of pressing the wrong letter. but i rarely do this anymore since the watch has been set up to what i need it to do (which is mostly for gps).
the one thing i'm looking around for is trying to either deactivate or change the watch face. i noticed that this can be done for the sony smartwatch...i'm still trying to find a way for the ik8. no luck at the moment though...
Samsung Galaxy Note 2
Xperia Play, iPhone 4 (office phone) and the same Nokia 8850 from 1999
HTC HD2 (T-Mobile), HTC Desire
HTC Touch Pro 2
Nokia N95 (remind me never to go back to Symbian)
Ericsson - something
Motorola - something
Nokia 8850 - 1999