what version do you have now?
Is your mic a good quality one?
worn out maybe?
-same with the sound card if old or worn out will cause troubles with recognition.

I had to try another sound card before my Via Voice would work after I got a new mother board.
the built in sound card will not work with my mic -but with my old
Sound blaster card added in - it all works fine.

so my speakers are plugged into the built in sound card and my mic is in the soundblaster card - I just have to disable one to use the other

If you need more info on dragon - many on the Thoracic outlet forum use it.
the link to it-
http://neurotalk.psychcentral.com/forumdisplay.php?f=24