Create text messages from voice?

I just installed Handcent today - it is very kewl! You can also use it to send and receive files like ringtones and pictures. I think the limit for sending files is 275k but at least it work!!

You can set unique notification sounds for each person in your contact list and set the LED to blink one of six different colors depending on contact.
While not a app for creating a text to send, SMS Popup, a free market app, has the option to hit a mic to record a quick reply (have to enable quick replies in app setup).

I believe it uses the default voice reg system in the Droid. It works ok half the time.