I just bought a new external mic (with headphone) for my laptop to use for Skype... since I wasn't so happy with the internal mic of my laptop. I have an Acer Aspire 5920G and use Windows Vista Home Premium.
Anyway, its a headphone/mic combined thing so I plugged in the headphone in the green slot and the mic in the red slot.
When I plugged in the headphone, it worked, I could hear sound, but when I plugged in the mic it was not detected and when I even tried Skype Test Call it wouldn't hear anything. HOWEVER, after I plugged in the mic in the red slot the INTERNAL mic in my laptop wouldn't work at all until I took it out. So I tried plugging the mic into the BLUE slot, to my surprise it was detected as Line-In, and on Skype I changed the default recording device to Line-In too, but it would record or detect any sound at all.
Double check and make sure that you have the mic volume slider turned on in the sound control bar. If you have another PC try it on that, if that doesn't work I would say it's a defective headset.