@giles -- you're welcome. I'm planning to use PAW for an upcoming project and I'm really happy with what I'm seeing.
I've played with iSSH -- it's kind of a connectivity Swiss army knife with ssh, xterm, vnc, rdp, etc. I only use ssh and rdp. I don't think it's the best RDP client, but it gets high marks as an SSH client. I may start using an xterm soon, so I may look at it again. I also don't care for its simulated mouse/arrow/thing, but that's just me. Also, I like Prompt's extended keyboard. Personal taste.
Haven't looked at Diet Coda -- I'll have to check that out.
No matter what the client, now that ssh is enabled then using any reasonable dropbox editor + ssh + safari , then you're right -- you have a great development environment. I even code on my iPhone once in a while.
Don't know about "while walking", though -- good to look where you're going. :-)
Again -- thanks for getting this working!