Maybe you have both inputs--your pc speaker and mic--on simultaneously? Type "sndvol32.exe /r" in the RUN thingie to check... [/StabInDark]
Did you try steampowered forums?
This is probably just another example of how Valve can't seem to get the simplest things to work right, even after all this time.
For the longest time, my Server Favourites kept disappearing, and the "buddy list" worked spotily, or not at all--both of which I haven't even bothered with in a long time, since they never worked right for me.