Since the first thing you are going to do each time is read what you can, and think about it, I like the automatic hiding in principle. Perhaps it would get annoying or flickery but I think I would like it a lot. I definitely find there are lots of times where I wish the keyboard would go away (for some reason when in landscape mode I rarely get the bar at the top where I can tap Story List or show/hide the keyboard) and it seems great to recover so much real estate automatically.
I would think the main downside to the automatic hiding is if you lose characters as you are trying to zip through a maze or something, where you already know what you want to enter and are in a hurry. However I have noticed that when you tap so that you can scroll (or enter your next command), if it is a non-space character you tapped then it actually does double duty and scrolls to the command line and also registers toward being a command. I like this. And since it does this, I don't see any downside to the automatic hiding. I do think you already get style points for having so few preference settings right now, but they don't get in the way, so I would favor adding this as an option.
Under v1.6, I have noticed some irregularities in the size of the left margin in landscape mode - I was playing Zork III and at one point I was at the Barren Area (so of course it said "Barren Area" in the left edge of the status bar at the top), and the left margin of the main content lined up exactly at the end of "Barren Area", so that left margin was at least a half inch. Whereas now I am looking at it (still landscape) and the left margin is much smaller, lined up with the lowercase e in "Endless Stair", so it's maybe a quarter inch. I noticed the margin shift significantly horizontally yesterday when I was saving or restoring or something; I don't remember the details. I know I was getting killed by the mysterious stranger a lot. But even now it seems like the margin is larger than it needs to be; when I switch to portrait the margin lines up with the capital "E" in "Endless Stair". I am using Marker felt, 14 point, if that matters...
And just to be clear, I am NOT complaining about anything - I love it! - just thought you might like some debugging info.
-- Jeff