I'm having similar problems. My headphone/mic set up is plugged in correctly. Well, I can hear all playback and can record in to my computer using the mic, but can't hear myself in the headphones when talking into the mic. Does that make sense?
Some audio cards have the option of playing the sound from mic directly to the audio output, and some don't. Mic is primarily an audio-in. Check the properties on your volume taskbar. There should be a slider labeled "Microphone". If it is not shown, then you might need to check the microphone checkbox in the options/properties. If you don't see microphone in the list of volume controls, then your audio card doesn't support it.
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Posting Virtuoso
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since May 2006