Apple has gone to great lengths in the latest version of the iOS 5 beta to make their implementation of a speech-to-text feature nary impossible to find.
9to5Mac released a screenshot of an updated iOS 5 standard keyboard complete with a microphone button. The speech-to-text feature is incredibly simple to use. According to 9to5Mac:
Just click the microphone icon next to the space key and start talking. Once the key is clicked, a new microphone overlay will appear as long as you are talking. After that, the text will appear in the text field
For example, calling the microphone button "forward delete key" and the keyboard pretends to be a "Dvorak" keyboard. - MacRumors
Source: MacRumors, 9to5Mac