Most mobile keyboards will do autocorrect as you describe it, and show top-N alternatives when you go back and tap on the autocorrected word. I prefer this to it mocking my mistakes and making me pay penance by manually accepting the correction.
I prefer the opposite since it absolutely trashes proper nouns and makes it extremely annoying to type bilingually.
Yeah I'm thinking about my desktop computer. Also, I find that the autocorrect on my phone is not that good, especially when the first letter is incorrect.