Same here...I almost went crazy because the chatpad worked the first time I played, then wouldn't work afterwards. Just to reiterate what rcl9451 said:
1. Power up two wireless controllers
2. Make sure the second player controller has the chatpad attached
3. Startup Coffeetime Crosswords and use the second player controller to play the game
4. The chatpad should work!
It's still a little clanky because you have to move the cursor everytime you type a letter, but still wayyy quicker than the virtual keyboard wheel in the game.
Cheers!