Update
If you are upset that the iPhone currently does not have built-in voice recognition, this app will not help you. This app is also not good for people who want to keep their iPhone in their purse or pocket since you must touch the screen to activate. If you want a voice recognition dialer for the iPhone that works as advertised, VoiceDial is a nice app to be used primarily when driving. The best setup is to put the iPhone in a holder in your car lighter or anywhere within reach to tap the screen in front of you with a quick glance, the same as you would to adjust the stereo settings. Set the phone and launch the app before you start driving. Is this more of a pain than the tons of other phones with built-in voice dial that works even by pushing just one button on a Bluetooth headset - YES, but until Apple builds this feature into the iPhone, we have to either buy a different phone or use an app like this. Record the tag words with the phone in the holder in your car, including one tag using the headphones and it will always recognize the name unless there is too much other loud noise around.
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Voice Dial (speech recognition app)