(Dragon does not support dictating to background windows.) The software has three primary areas of functionality: voice recognition in dictation with speech transcribed as written text, recognition of spoken commands, and text-to-speech: speaking text content of a document.
As an example, dictated words appear in a floating tooltip as they are spoken (though there is an option to suppress this display to increase speed), and when the speaker pauses, the program transcribes the words into the active window at the location of the cursor.
Dragon NaturallySpeaking uses a minimal user interface.