How do I create this effect of instantaneous typing in a video?
Sony Vegas Pro comes bundled with NewBlue Titler plugin which has a 'Type On' transition preset which does this automatically. After Effects can do this as well: see this tutorial.

Basically, this can be done manually in any program in which one can animate masks. In short, in one frame the mask shape extends till the edge of the currently revealed letters. It is keyframed to hold that shape till one frame before you are ready to reveal the next letter. On that next frame, you expand the mask to uncover the new character.