In Ubuntu 14.04 the "Disable while typing" in touchpad settings does not work

The problem is with the "-t" option for syndaemon. It messes with syndaemon's functionality. The solution is to uncheck the "Disable while typing" checkbox in System Settings (Mouse & Touchpad) and add your own syndaemon command in Startup Applications (eg. /usr/bin/syndaemon -i 1.0 -K -R -d).