Ah, well since you can hear your voice, I know the problem.
Open volume control>edit>preferences>
Check mark microphone&micboost, if you have it plugged into the front mic port check the front mics not the mic.
Check mark analog mix, if your hearing yourself through your speakers chances are your mic is working you just haven't setup the recording.
In preferences checkmark the capture option, in addition to the input source option, just check the first of each, input and capture.
Two new tabs should have appeared in your volume control, the ones we're looking for are recording and options.
Make sure capture is turned on, not muted, then go in input and change the input source dropdown to where you want the recording to come from.(IE front mic boost,mic boost, etc)
You should have the input source correctly set, capture turned on and set to at least 70%, mute analog mix so you can stop hearing yourself, depending on your mic setup; in playback your mic needs to be set to a estimated tolerable volume.
Open sound recorder, select capture or whatever microphone you set it to, and it should work fine.
Custom-Built comp, Mint for desktop, Windows Vista for gaming, shared data partition for personal docs:
AMD x2 4200 2.2ghz
MSI 8600GTS stock OCed
Asus m2n-e mobo
2x1gb, 2x512mb=3gbs ddr2 800
Seagate 230gb drive