Help with my first plugin

Hi guys

Im hoping to start developing wordpress plugins to expand my knowledge of PHP while also making plugins to help people out.

This is my first plugin, so I thought i would go with something Extremely simple, or so I thought it would be. Basicly, when you activate this plugin, and goto the plugin menu in the admin panel, you can select a word you wish to replace, and then the word you wish to replace it with, and the plugin will do this for you, if you wish to change back – you can simply disable the plugin.

As far as I can tell, in theory the following code should work, however it is not. I was wondering if some-body could explain why not?

<?php
/*
Plugin name: Jake's plugin
Plugin Description: This is a plugin which when activated, will replace a word with another word..
Version: 1.00
Author: Jake Austwick
Author URI: http://www.game-tec.com
*/
?>
<?php

 function test_nav() {
  //add_options_page(Title,Menu title,Access Level,File,Function)
	add_options_page("test","test",1,"plugin.php","test_admin");
}

add_action("admin_menu","test_nav");

function test_admin() {
	echo '
<form method="post" action="'.$_SERVER['PHP_SELF'].'">
Word:
<input type="text" name="word" />
<br />
Replace with:
<input type="text" name="replacewith" /><br />
<input type="submit" />
</form>
';}

if($_POST["word"] && $_POST["replacewith"]){

function replace( $content ) {
    $word = $_POST["word"];
    $replace = $_POST["replacewith"];
	$content = str_replace($word,$replace, $content);
	return $content;
}
add_filter("the_content",replace);

}
?>