The Windows Phone 7 on screen keyboard is nice, but when I'm running the emulator I often wish I could use my physical keyboard to speed things up.
Apologies if this is old news, but I'm new to this.
Turns out it is really easy. Just press Pause Break on the physical keyboard to toggle between using your actual keyboard and the phones touch screen in the emulator. Page Up and Page Down can also be used.
Your physical keyboard will be used to simulate a hardware keyboard on the phone so there can be some odd mappings. See Keyboard Mapping for Windows Phone Emulator.