The tachyon guys came up with quillpad years back, check it out: http://www.quillpad.in/hindi/

They even have Malayalam, that's quite a surprise, I thought maybe Bengali will come in before Malayalam, not that Bengali is any simpler to do than Malayalam.

I tried it and my account became unavailable.

Wonder why that happened. Works wonderfully for me.

I can imagine the huge amount of effort gone into this feature, since Hindi is richer phonetically than English.