Update: artiesberry let us know that the app has been changed to $0.99 from free by the developer.
I have been simply using Google for years as a dictionary on my BlackBerry but Jason introduced me to Pocket Dictionary from SRID Games. This is in no way a comprehensive Oxford quality dictionary but it does work well and best of all it works offline. You only need an internet connection if you want to play the pronunciation of a word. It offers up over 1 million words and gives you the ability to set your own user defined list of words to come back to.
Check out Pocket Dictionary free in App World