PocketNow has put together a video showing the speech recognition software in WP7. They note:

You’ll definitely be able to dial contacts, open programs, and run Bing searches from the speech UI, but I don’t see any options for controlling the music player, asking about upcoming appointments, reading incoming messages aloud, or announcing caller ID names like Microsoft Voice Command could do 7 years ago. Nor do I see any of the cool TellMe speech features like the ability to send text messages transcribed from your voice.

 

 

Here it is in action:

 

The settings screen for speech is above as well and as you can see there is the ability to do recognition over the network or locally. There are settings for speech confirmations, using speech even when the phone is locked and enabling network recognition which is required for web searches. 

I was hoping for a little more functionality and speed. You?

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