Text Shortcuts allows you to define sequences of key presses that will enter some text. For instance, the sequence "Ctrl+: A" will type a capital A with an umlaut by default. Press Ctrl and colon together, release them, then type "A" and Text Shortcuts will type out "Ä" instead. The default set of shortcuts is taken from my old Accented Character Shortcuts extension, but you can now edit those shortcuts, remove them, and create your own from the Text Shortcuts preferences page.
Key sequences can be any length and the text they enter can be anything. There's nothing stopping you from making "Ctrl+~ ~ ~" type out "I love bacon!", just be careful that the shortcuts you define don't overlap with Opera's keyboard shortcuts.
If you forget which shortcuts are available, you can print out the full list as either plain text (which Text Shortcuts can also import) or a pretty HTML page from the Import/Export section of the preferences page.
By default, Text Shortcuts will hide its extension button and display it to show you when you've started a shortcut sequence. If you don't like this behavior, you can select from a couple other notifier modes or disable the notifier all together.
Text Shortcuts works in all normal text boxes, GMail, TinyMCE, and most other rich text editors using contenteditable or designMode. It does not work in Opera's UI elements. If you find a site where it doesn't work, please tell me and I will try to fix it.
PLEASE direct all your bug reports to the support page. I can only respond once here, but I can answer your every question there!