Frequent mode changes slow you down - if your hands are on the keyboard switching to the mouse takes considerable time. The same is true in reverse. AlanCox? has also attributed wrist problems to switching back and forth too much.
A user interface should ideally minimize the number of keyboard-to-mouse transitions needed. This tends to imply dual mode controls - being able to execute a command equally well using mouse or keyboard, or at the very least make as much of an app as possible use one or the other.
Even when using a keyboard exclusively, people often need to move their hands away from the "home row" position for certain keys. The page-up/down and arrow keys are usually separated from the main keyboard, requiring a transition between a typing position and a cursor-moving position. Many times people also move their whole right hand to use the enter and backspace keys. Other tasks which mix alphabetic typing with numeric-keypad data entry also require a similar switch. A few keyboards have experimented with a split spacebar (where the left half is a delete function) or arrow keys in the center of a split ("natural") keyboard layout.
One of the advantages of the Wiki:KinesisKeyboard layout is that it does not require large movements for the editing and positional keys. The arrow keys are below the C, V, M, and , keys. The backspace key is under the natural position of the left thumb, and the enter key is a small shift of the right thumb (which normally handles the space key). The home/end/page-up/page-down keys are slightly larger shifts of the thumbs.
Of course, that can also be solved in software. The traditional example is the Unix vi editor, in which the user frequently switches between "command mode" - where the alphabetic keys represent commands on roughly a 1:1 basis - and "insert mode" - where the alphabetic keys cause letters to be inserted into the document. Whether this is easier or harder for humans to get used to than specialized keyboards is perhaps a subject worthy of discussion.
The Kinesis keyboard also works very well with a touchpad (like [1]) which fits in the center empty area of the keyboard. This setup makes it much easier to switch between keyboard and touchpad/pointer usage. Some low-precision tasks like selecting links in a webbrowser can even be done with the non-dominant hand.