Microphone not working properly?

I have Windows Vista Home Premium. Whenever I set up my mic (Control Panel -> Speech Recognition Options -> Set up microphone -> Headset microphone) the volume appears to max out immediately, even on minimal volume. Then it suddenly falls down to the green zone. After the test, the computer said it couldn't hear my voice. When I talk to people on ventrilo having this problem, they said that there was a ton of feedback and static noises. How do I fix this.