Nuance Speech Recognition implemented in internal iOS 5 version.
Before the iOS 5 presentation at the WWDC 2011 last week, it was widely expected that Nuance powered speech to text integration will be part of it. Apple though did not mention it. Now a screenshot of settings in an internal iOS 5 build surfaced that show Nuance Dictation integration.
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A high quality voice to text implementation would make typing a thing of the past on the iPhone. You only would need the keyboard in situations where you cannot talk. I did not try Nuance's Dragon Dictation software in a long time. A couple years ago it was to annoying for me to adopt. Maybe it is time to check it out again.