I don't know about MS Speech Engine 5, last time I tried MS voice recognition stuff it didn't work too good. Dragon isn't perfect, but it can become very accurate, you have to triain the software to do what you want. A good MIC is key when it comes to voice recognition and a good headset will do. But I want to go without wires and I'm using the H4 to do that. It can capture my voice from a distance.
Problems with present VR:
Spellilng can be mixed (it, fit, meet, eat, meat)
Background noise (computers, cars, other people)
Websites need to be simpler
When you play music or video the software doesn't remove this from the MIC, so it gets mixed with your commands and the software cannot understand you.
Requires a lot of hardware. I tried with an Athlon 64 3400 and it didn't do too good. However with two processors it seems to handle it better.
Eventually voice recognition might get to the point of being smart enough, but it's just beginning and it will take a few years until it truly becomes useful. You can combine it with a tablet pc and that is very impressive.
Someday VR may become more like this:
http://youtube.com/watch?v=G_FS2TiK3AI