Same problem here. On my ETEN Glofiish X500, there is a button with a "record" icon but the system settings list it as button 1. However, none of the button settings in Pocket Dictate will do anything aside having the chosen button start the software. Changing the "record" button to button 1 in the options dialog of Pocket Dictate will not allow for activation of recording but only start the Pocket Dictate software itself.
That's a shame, I'd like to purchase Pocket Dicate but won't go with touchscreen buttons only.
Best wishes,
Malte