SuperS54: I don’t think you understood my point. Despite the fact that ‘night’ and ‘knight’ sound the same, native speakers don’t have any trouble distinguishing them in ordinary speech.
The broader point that I am making is that a literacy-driven approach to Chinese tends to produce people who can read Chinese at near-native levels but do not speak Chinese as well as they could. I think most long-term students of Chinese like myself (10+ years) will tell you that reading and writing Chinese is the easy part. Speaking Chinese fluently and accurately is much more difficult. I think this is because language-teaching programs emphasize reading and writing skills over speaking and listening. It’s easier to teach, and it’s what many of the most motivated students want to focus on when they start.
regan: I think that watching TV soaps is an excellent way to learn the contemporary Mandarin spoken in Taiwan ( Movies less so because most are dubbed by people with exaggerated accents). I find it very useful to see if I can repeat what the actors say. I think it improves listening comprehension, usage, and fluency. Of course you do have to put up with all the melodrama.
As for computer software, I hear that Wenlin (www.wenlin.com) is very good (especially for advanced users).