Speech-To-Text User Interface got spotted in latest iOS 5 developer release.
The rumors of a Nuance and Apple partnership preceded the WWDC 2011. At the iOS 5 presentation though Apple did not mention anything about that. Now according to 9to5Mac received a bunch of screenshots that have been hiding inside the iOS 5 beta release. The screenshots show a keyboard with a microphone button. When you press the button a large microphone icon appears (image above). After speaking the text appears.
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The speech-to-text feature is apparently still not complete, but it looks like Apple will be able to surprise us with this new feature once iOS 5 rolls out this Fall.