All right, I'll shut up now. I'm not gonna be much help with Win 7. I just wanted to make sure it was your recording volume that was maxed instead of playback volume. The Microphone is an option for both playback and recording so it is a common mistake.

...come again?

I should probably just stop posting so I don't confuse you since I'm using XP. What I've been trying to get at is that, in XP at least, the recording volume controls and the playback volume controls are independent from each other. It's been a common mistake to think that increasing the volume control for the microphone in the playback options will increase it's recording volume, which it doesn't. This is my experience with XP though.

Sorry for confusing you with my XP lingo :P I might be doing more harm than good here. It appears that the pic that adambiser posted is probably how you would control the recording volume. My suggestion would be to google for anything related to "recording volume control" for Windows 7 and if that doesn't do the trick, you might have issues with your mic.

Well, this is what I can see from my Audio deck

"Mute" is not checked is it? It's kind of hard to tell, but it looks lit up...

Nope. The lit up section is "default volume" button.

Would you post screen shots of the Windows 7 sound properties for Playback and Recording Devices?

Well, they are in Finnish...

Aha! So what KyleKatarn was talking about is NOT gone from Win 7.

Go to the Playback tab.
Select "Speakers"
Click "Properties"
Go to the "Levels" tab...
Make sure Microphone is turned up there. (Also make sure it's not muted, but it doesn't sound like it is)

(That "Aha!" was not related to anything I found in your screen shots. I was just toying around inside the settings and found that.)

Not to derail the thread but did you test it to see if that "Levels" tab fine-tunes the recording volume? I'm just curious because I really like being able to fine-tune several different sources with the recording control in XP and from what I've read from googling this issue just now, people like me who like that feature in XP have been frustrated with Win 7. It's an issue I wasn't aware of and it kind of put a damper on my enthusiasm for upgrading.

It has been awhile since I've used XP, but I think actually like the sound control in Windows 7 better since I can adjust the volume for each program individually (at least while the program is running... I don't think it remembers settings between runs).

Here's the screen I'm talking about for reference:
Note: I don't have a mic plugged in for the screenshot, but the concept is the same as I remember XP (I think),

I realize I didn't exactly answer your question. I don't have a mic to really test things out.
I don't know if that will affect the recording volume or not. That might also boil down to the sound card, too.

Okay, cool. Don't worry about testing it either, I don't like asking other people to do that kind of stuff because it takes time and effort to think (and I hate working for free). I was just curious if you already did it or not.

That screen looks like it might be for playback control to me instead of recording control since it's in "Speakers" and the top slider looks like the master audio output slider, but I could be wrong. I wish I could test it myself. In XP I could have my mic playback at glass-shattering levels through my speakers but record the same sample on my computer very quietly at the same time. If KTC maxes that and if it's only for playback, he'll hear his voice loud and clear through his speakers or headphones which would indicate that there isn't a problem with the mic, but it could still be possible that the recording level is down so that when he records with the mic, his voice will still be quiet when he plays back the recording. I kind of suspect this because he says that Skype works fine with his mic. I'm pretty sure the volume used for the mic in Skype would be different from the volume used for recording. Skype probably uses the playback volume, but I can't say that for sure.

Yes, that is what it is. KTC checked the recording levels and said they were maxed. These are the playback levels. They may or may not help out, but at least that does show that there are two places where "microphone levels" are listed like you mentioned.

Most likely it won't be the problem, but I'm grasping at straws.

I do think it's a problem in the actual recording level since he mentioned that the meter didn't move when he talked but did move when he blew on the mic.

The Skype part of the problem is confusing. It doesn't make sense that they can hear unless Skype changes the volumes behind-the-scenes, which is very possible.

Me too. I don't think I can be much more help here. I'll keep an eye on this question though because I'm curious what the solution might be in case I upgrade to Win 7. I did see that there was some automatic feature that turns down volume for some programs when Win 7 detects communication activity, but it didn't seem like that would be the problem to me since it should turn down the game volume instead of the mic volume.