Start > Control Panel > Sounds and Audio Devices (Classic View; top-left corner) > Advanced button (it'll open the sound options as if you double-click the sound icon in taskbar down by date and time in bottom-right of desktop).
Make sure Microphone is an option in the list:
Options > Properties > check Microphone > click OK
Mute microphone:
check the checkbox under the Microphone option.
Make sure everyone can hear you:
1) Increase slider to max level
2) Options > check Advanced Controls
3) Under the microphone slider, click Advanced (it may not be available) > check Microphone +20dB boost
FYI, muting the microphone will solve the "I can hear myself" problem. All it does is mute the microphone action from being sent through the speakers. Test it by using Sound Recorder:
Start > Programs > Accessories > Entertainment > Sound Recorder