Not sure where you live.. but i went to Radio Shack.. and i just bought a Adapter for my Headphones.. Plugged it in and it worked fine for a good couple months till i got some spare money to buy a new wireless MS Xbox mic.. and thats what ive been using since..
I know recently i used the adapter again.. I sometimes like to go on XBL and hook a cable from my iPhone to my Xbox Controller Mic Connection and play Soundboards of random things.. just for fun between Search Rounds on MW3..
When you plug it in.. do you have the little Mic connection icon in Party Chat? And are you using a headset with a mic? it has to have a mic somewhere..