Nice job Thom! The layout you came up with looks much more usable. I have one suggestion which would make this even better, and the good news is it's quick and easy!
Have you thought about placing letters on the number keys like a hardphone would have? I have found that calling some customer service numbers like 1-800-DIRECTV can be quite difficult if you can't remember which letters are on which number. For example
1 2 3
4 5 6
GHI JKL MNO
...you get the idea. Anyways, looks great!