Answer:
First of all, this question is not about Google Chrome, so please put your questions in suitable category.
Second, Speech recognition softwares work on WAVES. They store all the basic speech letters as waves in their database (or any other store). After than when speech is made, it is matched with database contents to get appropriate letters/words.
To get the whole idea, search for following tags in Google:
speech recognition code
speech recognition waves
speech site:planet-source-code.com
Have a nice day!
Pradip