It is a keyboard replacement and looks like the original version, but as you type it provides a much earlier guess on what you want to type next. Eg I wrote most of the previous sentence without typing any of the next word and selecting from the list it chose based on the word I had just completed. Soon it may start sending messages on its own.
I love SwiftKey - got it for $1 during a promotion. It supports two concurrent languages, which serves me just fine :-) And as David says, sometimes it predicts every single word in a sentence correctly.
My phone didn't have Swype installed - its sounds like there are devices that do, like Christophe's?