It's been ages since I got the 4.2 update on my phone (at least it feels like it), and yet I hadn't tried out the gesture keyboard feature yet. I'm an avid Swype user, so it's a pretty exciting thing for me. I bought Swift Key during the sale a while back, but it never really felt fast. Don't get me wrong, the prediction engine in it is wonderful, given sufficient time to adapt. I wish they'd license that tech to other companies personally.
I've been using the Swype Beta on my phone almost since I got it (barring the usual issues with their idiotic installer), and it's just what I'm most comfortable with. Google's effort is very nice though, I'm using it type this now actually. A few of the gestures are different - example, I've not yet figured out how to insert apostrophes mid-swipe - which definitely takes some getting used to.
The real time guessing that tracks just north of your thumb is fantastic! If you're not sure how a word will turn out, just don't pick up your thumb immediately. Most of the time if the guess is wrong, a quick minor movement left or right can pick the right one.
It sucks you can't go back and pick another guess at something after you've already finished that word, as you can with Swype, but I'm getting used to it. Since the rest of 4.2 feels really half-arsed, maybe the keyboard will see some improvements in very short order as well?