When typing, as you know, you can accept the suggested word by tapping the spacebar, a punctuation mark, or the Return key. You can reject the suggested word' by finishing typing the word as you want it, or tap the 'x' next to the suggestion to dismiss it. Each time you reject a suggestion for the same word, your iPhone keeps track and eventually adds your word to its dictionary.
Here's a trick I use to temporarily stop suggestions from appearing:
Start by typing the symbol '$' or '&', or a numeral (such as '0'), or the letter 'z', and then touch and hold to insert letters before it. As you type letters, the keyboard won't suggest anything, because it won't know what you mean -- there are no words in its dictionary that end with these symbols, numerals, or the letter 'z'.
These and other tips appear in my $2.99 iPhone app, "Tony's Tips for iPhone Users Manual" which you can find in the App Store by searching for "Tony's Tips".