From experience from the 6.5" ones, if you do it too quickly (within 30 secs), especially if you just turned on the car, it hasn't locked on the GPS signal yet, then even after putting the first 2 digits, say...W2, the remainder of the postcode will be blank (greyed out). usually I go back, wait a min, then try again, and the letters won't be greyed out. Sometimes if it's not ready it will show 'loading.' and then freezes. Not sure if same on the 8" one, but this was my experience on the 6.5" one.
Edit* mine is done without spaces. I just type in say...W21AB, it will know I mean W2 1AB, if too soon, I type W2, and 1, and I can't put AB, all letters greyed out.