I have been able to access sanskrit fonts. How do I type half letters to get compound letters in Sanskrit?
The UTF-8 sanskrit set makes composite letters quite simple to enter using the virama, http://en.wikipedia.org/wiki/Virama. That is, a compound is created by entering each of the individual letters with a virama between each one. For example, क्ष is composed of क ् ष , त्र is composed of त ् र, ज्ञ is composed of ज ् ञ, and so on.
As far as keyboard layouts go, this is probably up to personal preference. Anything which can enter the UTF-8 sanskrit range will do, even an on-screen keyboard (I created one here: http://www.devananda.net/kb/devanagari.html). I find the Hindi (Wx) layout very usable.
To select it, open "System Settings" -> "Keyboard Layout", select the "Layouts" tab, and click the small "+" sign at the bottom-left. Select the "Hindi (Wx)" layout and install it. You may need to log out and back in for some things to take effect. You can also click the small picture of a keyboard on the bottom-left of this screen to view the layout. In any case, using this keyboard layout, entering compound sanskrit letters is quite simple -- the "a" key enters a virama, and the font takes care of the rest.