Typically, I use speech-recognition functionality to dictate directly into Microsoft Word 2002, but sometimes (particularly when I'm multitasking) I find that Word becomes unacceptably slow. At those times, the old, reliable Windows Notepad turns out to be a handy alternative. Notepad works surprisingly well with voice input, although you must edit the results and capitalize the first letters of all sentences. Such editing is fairly easy to accomplish, and you could probably set up a Word macro to take care of it.
If any software developers in my audience are looking for a project, let me suggest one: How about a simple dictation application that would provide just enough intelligence to recognize such necessities as capitalizing first letters of sentences--without the tremendous overhead of a full word processing application? You won't get rich off such an application, but it would get a great deal of use. (Microsoft, are you listening?) In the meantime, using Notepad for voice input might not be pretty, but it works!
