Doug, is it really
every time? There's a known bug (at least, somewhat known, certainly I reported on it some time back, and I've seen a couple of posts in the iPhone forums on it) where tapping the backspace key when the cursor is in front of a capital letter that follows a period (without an intervening space) triggers a high-speed delete of the entire text field.
I have not seen this personally in v2.1, but it was reproducible in v2.0.1, and occurred in Contacts as well. When I experienced it, tapping any other keyboard key stopped the rapid delete.
EDIT: You could confirm that it's a software issue, not your touchscreen, by rotating into landscape mode, then tapping the text field, typing, and tapping delete in landscape mode, since the backspace key would then be in a different physical location on the screen.