How to treat papers or other work from dyslexic students?
The disabilities office at my Univ (large state univ in the U.S.) strongly advises that instructors not attempt to improvise accommodations for students with disabilities, whether self-declared or documented through the disabilities office. Their point is that we (outside the disabilities office) are not at all experts in such things, in the first place. Rather, the disabilities office will discuss with faculty the possible sensible accommodations, and in effect negotiate something. Faculty should not "get creative" and take initiative.
A significant point is that, although the circumstances or environment or timing or... for exams can accommodate, there is apparently never any notion that the grading rubrics should accommodate. That is, it's absolutely not that lower standards are applied to the output, but that the situation in which the output is produced can be modified. Indeed, it is not that we expect less in such cases, after all!
For the student perspective, I would put forward that a learning disability will not stop you from becoming an expert in something you are currently bad at. The notion that if you cannot spell or write at 17, you will never publish a best-selling book is just not true. Speaking from experience as someone who's parents were told "he will never go to university", but is now about to submit his PhD thesis, you can literally learn anything if you spend enough time on it.
And let's be honest, you can sugar-coat it as much as you like at school, but out of academia you will be penalised for being deficient in some area. The best thing you can do is work on it to bring whatever it is that you are not so good at up to par. For example, I was terrible at spelling, my handwriting was not legible even to myself, and my sentences were confusing. I suffered a lot in exams as a result, particularly the handwriting since no one ever asks you for clarification on a word.
However, after typing into a computer for every day of my life since then, and learning from the autocorrects by manually re-typing them, my spelling is near-perfect, and my sentence structure - well, i'm not going to be writing any novels any time soon, but it is ok. My handwriting still sucks though. In short, the best tools to improve your written communication is website comments, a pen pal you can e-mail, and IRC. If you cannot write in those three scenarios, you will be abused, embarrassed, and ignored, respectively. (and you will learn!)