I'm trying it now. Seems to work even with the TV going like you said.
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The thing I don't get is why it has to be processed remotely instead of your computer doing it. Products like Dragon dictate don't require anything be sent out for remote processing. I could understand maybe that iPhones or iPads can't handle that sort of processing, but Mountain Lion runs on regular computers which have sufficient processing power to do the job themselves.
I suppose this bypasses the learning process that Dragon has to do, which takes quite a while to get good.