If you tap the suggested word that appears in blue it leaves the spelling you typed alone, this isn't always great however as I don't look at the typed letters when typing and look at the keyboard instead. It would be better if it learned as you typed and didn't suggest the whacky words it comes up with from time to time.
It would be nice if the iPad gave a visual or audio indication when it decides your spelling isn't correct, a chime or a flash of the keyboard colour for instance, to notify you it's going to change the text you've entered.
