On Windows Phone 7, go to Settings, email & accounts, add an account, the Windows Live (or any other). Note at the bottom there is the gray panel with a rectangular [sign in] button. Click in the email address field, and the on screen keyboard pops up ABOVE the gray panel. Rotate the phone, and the gray panel does not rotate, although the page does. That gray panel is the Application Bar, is it not?
I only find docs for adding an icon-based round button (and menu items). How do we put a rectangular textual button on the Application Bar?
Adding buttons in the Application Bar is not supported for third party developers. The Application Bar itself is not a Silverlight control; it's a native one. Only OEMs, certain partners and MS have access to the native SDK, so you won't be able to template the Application Bar to have buttons. Of course, you could create your own Application Bar that mimics the real one, but I don't recommend that approach as it would be very tricky to get it exactly right and be consistent between apps.