In Taiwan children's books are written with this alphabet as a way to allow them to read before they have started learning characters. This alphabet is also used in the dictionary to show the phonetics of characters:
Input is similar, you spell the Chinese word and characters pop up for you to choose from. This is actually not the only way to type in Chinese, but the other system is a similar I believe.
So... there you go. I hope that wasn't too confusing!
Anyway, I guess I should get back to studying and stop procrastinating!