I am a user of Ubuntu Linux on a Samsung X20 Laptop with Synaptics touchpad with integrated toggle touchpad button.
The reported issue did not appear before Ubuntu 9.10.

This is the attempt to summarize a bug reports from Ubuntu, which are related to the Synaptics driver and/or the introduction of the key:
/apps/gnome_settings_daemon/keybindings/touchpad XF86TouchpadToggle
I found similar bug reports for OpensSuse.

This gnome setting key was not present in earlier versions of Ubuntu (e.g. Gnome 2.26.1 in Ubuntu 9.04) where the issue did not appear.

Setting this key to empty via
gconftool-2 --type string --set /apps/gnome_settings_daemon/keybindings/touchpad ""
seems to solve/workaround the issue.

To reproduce: 
Disable the touchpad via the corresponding key (in my case a button that has been integrated into the touchpad)
Result: 
Keyboard does not work anymore, cannot type text. Only way to get back to a working computer is to restart the machine. 
Compare:
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-input-synaptics/+bug/571638

Rebooting does not solve the issue in all the case however since the gconf settings and synaptics driver do not play well together.
Compare:
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-input-synaptics/+bug/549727/+index?comments=all

The following comment tries to analyse the situation:
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-input-synaptics/+bug/549727/comments/103
In short: The Synaptics driver and gnome-settings-daemon both try to control the status of the goggle-touchpad key.

Anyway both problems disappear when the key is set to empty. (disabled??)

Please let me know if additional information is required.