Janmike34 posted a nicely produced concept video for how Nuance's voice recognition could be integrated into iOS 5. In essence, text fields can become speech recognition fields by tapping and holding on text fields. This functionality can be offered to 3rd party applications as well using the standard iOS text field.
While a nicely produced video, it's not more impressive than what Google's Android has, nor is it even more impressive than the technology we've known Apple has acquired:
Apple acquired Siri in April 2010. Steve Jobs has said that Siri's acquisition was for their artificial intelligence technology. Nuance is the company that powered Siri's speech recognition, so it's no surprise that Apple is negotiating with Nuance for use of their technology in iOS 5.