We're big fans of Dragon NaturallySpeaking speech recognition software for Windows, and now that same dictation engine is the underpinnings of Dragon Dictation software on the iPhone.
Just like its desktop counterpart, it types whatever you say, and its accuracy is remarkable. In fact, I used it to type this post, with accuracy approaching 98 percent. Not bad.
After you've spoken your piece, you can copy that text to the clipboard, or send it to an email or a text message. It's limited in the number of words you can dictate at a time, takes a few seconds to process, and it's hard to tell when you've run out of room. But hey, what do you want for free? It's a great way to fire off a quick email or tweet, turning talk into type as if by magic.