I haven't tried yet, but I read somewhere you have to train Windows to recognize your speech, then it will work in FreeSpace.
It's in Speech Properties in the control panel.
<edit> It's a little bit involved:
http://support.microsoft.com/default.aspx?scid=kb;en-us;306537<edit>links deleted
<edit> hmm, doesn't seem to be a good free way to do it. They want you to have Office installed. Any advice anyone?
<edit> I was unable to make speech recognition work with the SDK5.1. Even though I think I'm supposed to be able to, I was getting an error message. All the normal internet suggestions didn't work, so I think I figured something out myself, I'll try again later. However, I'm proud to announce I HAVE found free voice recognition software for flight simulators at last. Here's a list with the free one at the top:
1) Flight Assistant 2.0.0, FREE!!!!
http://www.thelindercompany.de/(Go to "Applications")
2) VR Commander, $9.95, 15 day trial
http://www.vrcommander.com/3) Voice Activated Commands 1.8.5, 30 day trial, $10
http://www.dwvac.com/4) Voice Buddy 3.0, $39.95
https://edimensional.com/index.php?cPath=235) Game Commander 2, $49.95
Game Commander 3, $74.95, $44.95 Upgrade
http://www.gamecommander.com/