My iPhone was silent in VoiceOver mode. I couldn't figure out the problem. The UI behaved as expected, and I could record and play back over the speaker, but when I tapped on a word nothing happened.
VoiceOver wasn't working.
I thought my phone was in silent mode, or that the volume was too low. It wasn't in silent mode thought, and pushing the volume up set the ringer to max. Still no VoiceOver though.
The trick was to try playing something on iPod.app. No sound came out, but in that mode I could change the play volume. That brought VoiceOver to life as well.
The volume mode VoiceOver uses is the same one iPod.app uses, but you can't set volume from VoiceOver; in that app the volume controls only change ringer volume. You can set it from iPod.app.
There must be another way to set VoiceOver volume, but even knowing the above I can't find it.
I don't see a lot of posts on this issue, so there's probably something else going on here ...
Update 4/17/11: Apple added a separate app/iPod volume control to a recent release of iOS 4. It's well hidden though. First get the multitasking icon list (tap home twice). Then swipe right to show the iPod controls. Then swipe right again. You will then see a volume control that is separate from the ring volume control.