You mean when you got the 2.1 update your physical keyboard didn't morph into one with a little microphone on it? Mine did.
If you want to use speech to text, slide the physical keyboard closed. Open it again when you want to use the physical keyboard.
Yeah but there's just one minor catch, for me anyway... when in gtalk in landscape mode, the virtual keyboard fills the whole screen so you won't see incoming IMs while you use it. Not a big deal really, but it would be nice to have a hotkey to trigger S2T with the keyboard open to avoid that.
Also, this is solved just by holding the phone vertical, since you can still see a portion of the IM window with the keyboard up.