Dark,
I just got a USB headset with microphone last Wednesday.
Sometimes USB devices have to be pulled out and inserted a second time to get them set up.
When I plugged it in, Windows said downloading device drivers but not through the headset but through my computer speakers.
Then the headset headphones turned on and my computer voice came through them.
I needed to check the volume of the headset and microphone so I went to control pannel, sound, and recording for the microphone.
I noticed I had two microphones.
I checked the first and it said set for default.
That meant the second one was the default.
I arrowed down to the second one and tabbed to properties
That is where I found it to be set at 85 percent.
I increased it to 100 percent.
Before exiting I hit space on the okay button.
I recorded my voice using the chat room software to find out the volume.
Hope this helps.

I

Dark, What USB microphone is this? Also, have you gone into the communications tab of your sound settings and setting the radio button there to "do nothing"? That setting shouldn't affect recording, only playback, Its goal is to reduce sound volume when in a VOIP call so that the call is louder than your system, but I've had bad experience with it and I don't like having audio levels change anyway, so I turn it off.

I have never, ever had a plug-and-play device have the issues you describe. Not even on Win10. Perhaps you are misunderstanding something and the device isn't truly plug-and-play. From what I understand, plug-and-play devices don't need any special drivers, they can work fine, and or are designed, for Windows generic USB host drivers. If the device says something about downloading drivers, it's possible it might be grabbing its own third-party drivers from an external source. If that's the case, then any problems you have are likely down to the third party driver and its compatibility with your system. Unfortunately if there is a problem, there's not much you can do unless that driver gets fixed.

I had this experience when I got a Yeti Pro microphone, which needed its own drivers. These drivers had to be manually installed. It worked fine for a while, but suffered from some glitches. Given the fact that this is supposed to be a fairly good mic with high resolution recording, and that was the reason it needed its own driver in the first place, I found these glitches unacceptable. After unplugging, re-plugging, and trying a myriad of things to troubleshoot, it stopped working completely. I reported this to the manufacturer, in this case Blue Microphones, and from what I remember, they more or less said that their drivers have only been verified up to XP. I was on Win7 at the time. I had to return it for a refund.

I've found the easiest way to test for problems is to use the "listen to this device feature" of Windows. If you go to the same place where you set your headset microphone level, there is a listen tab in that dialog as well. Check the listen to this device box and then in the list, you can select what device the audio will be sent through. You should probably pick your speakers here. Then hit apply and if all is well, you should hear your headset microphone over your speakers. 99 percent of the time, this is what I use to diagnose audio problems. Either that or my preferred audio editor like Gold Wave, Reaper, etc. But anything will work so long as it can record and play, and isn't overly fussy about working with audio devices.

Skype can be a bit of a pain about audio devices, especially in situations where you're trying to use stereo mix over Skype, which I often do when trying to show somebody something. There are ways around it but it's tricky. For microphone use, I've yet to have issue. It is a little finicky at times when trying to configure audio devices, but I can help you with that if needed. It's not hard.

Hope you eventually figure it out. Maybe it's worth contacting the manufacturer if you continue to have problems. I know it might just be a waste of time in the end but it's worth a try, especially if you're getting frustrated because simply nothing seems to work.

Dark,
I don't use voice recorder because of it's stupid settings.
I think you have to specify a sound format and recording length before it will work.
I use Gold Wave, Team Talk and Studio Recorder from American Printing House, but it is still very expensive but I think has a demo mode to try it out.

Dark,
I think the microphone is busted, damaged, malfunctioning.
I would take it back to the store and demand a refund and get another brand just to be safe.
I'm very hard on headsets and it's usually the microphone part that quits first.
My last microphone lasted 9 months.
I tend to buy cheep sets, but one time I bought an expensive set and it didn't last any longer.
I have to assume the computer isn't a laptop that you could take to the store and have them install the microphone.
But if you do have a laptop with a USB port, you could take that one to the store just to try the mike out.

@sito, I did go to the drivers page and was told I had the most updated driver, indeed the mike uses the generic driver.
Sadly I don't have a laptop or similar, and to honest if you need to set the thing to always use the same usb, setting the mike up on a laptop wouldn't help.

when I can be bothered I might try setting up skype, though as I recall on xp skype was rather finicky to setup when the mike was working.

Right now I'm just sick of the hole thing and sorry I wasted my time and money since I have essentially bought thirty quids worth of desk ornament.

Honestly if you ask me, I'd say the microphone itself is defective. I don't really trust computer stores anymore, as I've gotten things defective. I once bought a 6TB WD My Book drive. When I picked it up from the store which I will not name, it was just in a box with a little cellophane wrapped around the drive, and maybe a little enclosure to hold it in the box. It wasn't wrapped in something soft and shock-absorbent, and this worried me a bit. But I just wanted a nice huge drive that I could sit down and just let run, and use for backup as well as a storage tank. It wasn't meant to be moved around, so maybe the poor packaging job wouldn't harm anything. Got home, plugged it in, Windows didn't recognize it on either of my machines. Eventually it did work, but only after an hour or so of being plugged in, so I didn't trust it. Instead of messing with the store I bought it from, I called WD directly, and after hearing of my situation, they replaced the drive. The tech support rep was quite surprised that I was having this issue, and was also pleasantly accommodating as well to my needs as a blind PC user. The replacement drive was also a little finicky, but it eventually worked without issue, and has worked flawlessly on the new machine I got since then.

Several years ago I had a similar experience with cheap headphones. They fell apart as soon as I got them home and out of the box. So my trust for such places is lowering. Almost everything I need now, I buy online. Maybe it's just me, but I seem to be more successful that way. In the case of microphones, I'd just look up different things on Youtube and listen to people use the mics. That's how I've made a lot of my computer mic choices. I don't know much about desk microphones, but now that you mention them, it might be fun looking into them.

If I were you, I'd return your microphone, as setup shouldn't be this difficult. I've used countless microphones on all of my machines and haven't had a single problem with any of them, besides the one I told above with my Yeti Pro. And that was clearly a manufacture driver issue.