The voice recognition on the Nexus one is a game changer in many ways. I depended on the hardware keyboard on the Android G1, and I enjoyed the physical feedback that a keyboard provides. By comparison, an on-screen keyboard is error-prone, and sometimes tricky to use. With voice recognition on the Nexus One, Google has done away with many issues regarding data entry.
We all know that phones are too big when they have a physical keyboard, and useless for long emails when they don't have one. With voice recognition, you could speak out a major part of the email, and perhaps edit it to perfection. It is a huge time-saver. Even if this phone had a physical keyboard, I would consider using voice recognition for notes and emails.
I was hesitant about it working with my voice, since I have an Indian accent. Here is a demonstration of it working with my voice. See what you think of it.
In this video, I tested it on two sentences that were perfectly recognized. Of course, like any other software, it isn't perfect. It does make mistakes. That said, it is better than anything else I have seen, and works well for most common words. It certainly exceeded my initial expectations.
True to Google's openness, this is something available to every program on the Android platform, not a specific set of Google-only applications. My demonstration used a third-party application, a sticky note, to highlight this.
Here is a much better video demonstrating the voice input feature: