The Speech Submission applet assumes that you will use your default audio source.  On Fedora 12, you can set your default audio source for your USB microphone in your Sound Preferences:

• System > Preferences > Sound
• click the 'Input' tab to 'choose a device for sound input'
• select your USB device
  

In older Linux distributions, if your computer had an analog microphone jack (on your motherboard or on an audio card) the distro assumed that this was your default audio source, even if you plugged in a USB microphone (it basically ignores the audio from your USB microphone).  The easiest way to fix this is to upgrade to the newest stable distro.

If you do not want to upgrade your distro, here are some possible approaches that might correct this:

• Disable your motherboard's microphone jack (or the audio card itself) in your system bios (this changed on the menu you can select when your computer first starts up);
• Remove your audio card; or
  
• Modify the sound.properties file in the JRE\lib directory of your JDK installation.