Devin,
FWIW... I can dictate on my laptop and it gets things more or less right. If I put in commands, it is very accurate. I would suggest three things:
1. you MUST run through the voice training exercises. SAPI is something like 75% accurate if it has no voice training and over 90% if it does.
2. Get an external sound pod for your laptop. Many laptops have horrible sound cards built in. There are several out there, but you probably won't find it at BestBuy or something, you may need to order it. Andrea has one, but there are others. Here's a link to Andrea's:
https://www.emicrophones.com/microphones/prod_details.asp?prodID=003
3. Invest in a good microphone. You don't need to go nuts and spend hundreds of dollars, but a good mic with noise cancellation will save you grief.
If you are serious about doing voice development, then spending a little money on good sound equipments (pod and Mic) just makes sense. Of course, if you are a developer, you can often not control what system your software is put on, but at least you'll know it was working in your tests, so it rules out SAPI, and you can start concentrating on the hardware problems.
Finally, I noticed that your app will have other contestents making answers to questions? This is going to be hard if they are total strangers and do no voice training. Consider chenging your application to give them multiple choice answers, and you can really limit the words you needs (ie a,b,c) If you do the alphabet, you can also add the "Alpha Zulu" call signs used by police and Military for the answers.
Also, FWIW, numbers seem easier to get right than letters. One, Two, Three, Four, Five all sound distinctly different.