Well, I have iListen on two Macs - one is still Tiger and the other is on Leopard.
You need a USB microphone and they have very tight restrictions on which ones they will "support". Your best bet is to buy a version that includes the mic.
That said, I have one that came with iListen and another I bought separately. Both work fine. Non-USB microphones didn't work at all. Oh, and the internal mics on my Macbook Pro just picked up machine noises due to it's location.
Also - VERY IMPORTANT - iListen does not run on Leopard. iListen works by injecting 'keystrokes' directly into the system. It takes words and simulates the typing. Something in Leopard changed the way this worked.
See
http://www.macspeech.com/support/index.php?action=kb&article=153