I just got off the phone with John at MacSpeech who tells me that MacSpeech Dictate is known to be incompatible with Parallels Desktop for the Mac. (My symptoms were crazy internal capitalization within words and generally degraded recognition quality). Apparently there are no plans to make it work since "Parallels isn't really a Mac application" and in any event it's not supported. I had done a bunch of research before buying the product and had seen a number of reviews indicating that the software works with Parallels. I didn't see anywhere (including in the Dictate user manual) that indicated it doesn't. I just want to make sure the word gets out there that MacSpeech Dictate is NOT compatible with Parallels Desktop. Hopefully I'll be able to get a refund for the software from the vendor where I purchased it -- John at MacSpeech wasn't offering any recourse on their end.