What is Ken referring to? Is there a "creat" command?
It's a Unix system call that creates a file: At a Unix shell prompt, type
man 2 creat to learn more.
Man pages are also available online these days:
It refers to the UNIX system call to create new files. Linkers on some machines were limited to identifiers of at most 6 characters. Apparently, Ken had to work with such a linker and hence the create system call was shortened to creat to match this limitation. The irony is that create does too.
See also: What does the 9th commandment mean?
I'm six years late to answer, but I believe that the extant answers all miss the point of Thompson's quote.
I'd spell creat with an 'e'.
Ken Thompson is not lamenting the name of the function used to open and possibly create a file. Rather, he is expressing that Unix was done properly, i.e. there is nothing major that should have been done differently.
The subtle point is that Unix architecture is sound, and the implementations are fine. One would need to bikeshed to find anything to improve in Unix. Thus, the obvious nitpick about the name of a common system call.