Update on compatablity with Ethernet shield:
After extensive testing we found that there is a simple way to make this shield compatible with Ethernet based shield:

1. To provide clearance with Ethernet connector we found tall pin headers that allow to stay 1-2mm above ethernet connector
2. CS pin D10 can be simply moved to D8 with a little solid jumper
3. Pin D4 that used by a button and needed for SD card can be moved to D7 with a solid jumper

We tested LCD/keypad in this configuaration with Ethernet+SD tutorial form ladyada and it works great: for the test we redirected some serial port traffic to LCD.
http://www.ladyada.net/learn/arduino/ethfiles.html

Edit 3/5/2011: Modified shields for Ethernet/SD caompatablity are available!
Few un-modifed shields are still available - they are great is you don't need Ethernet combo.

Oliver and I also added future functionality that allows keypad data to be sent via SPI back to the Arduino

This future design will use onboard ATTINY261 for flexibility and allow A0 / CS selection from available 4 pins: D7-D10.

I am goning to publish hardware and the code, but it requires a new PCB that we did not make yet, may be some time in a future.