^^I totally saw a study on that, at some point. It was years ago... but they said that as long as all the letters that belonged in the words were there, and the first and last letter were in place, nobody could tell the difference.
I think (now) that it works to an extent. The last time I posted that, Jesin responded with a mixed up version of "some permutations are more readable than others," and picked the least-readable permutation of permutations that he could find. I did get it, but had to read it and think for about 15 seconds before I realized what he had said. It works with little doubt on words that are small enough, though.