Have you verified that your microphone is working?
Click the wrench icon on VoiceAttack's main window, then on the "Recognition" tab of the VoiceAttack options window click "Utilities >" and choose "Sound Settings"; In the "Input" section there should be a bar underneath "Test your microphone" that should move when you speak.
Also on the "Recognition" tab of the VoiceAttack options window, verify that the "Windows Speech Recording Device" option is set to the correct device (usually the "Default - " entry, unless you don't have your microphone set as the default multimedia recording device).