Microphone Issues

Before the actions I am about to describe to you, my microphone worked perfectly fine.

Recently I was trying to setup a Media Player on a friends Ventrilo, and did the instructions given Here. In the end, the only thing that happened was getting the same 1second sound to replay over and over again (Never understood why). After resetting my ventrilo back to defaults (I ended up deleting the old account and creating a new one) I ended up stuck with hearing my own voice! And no one else could hear me! They could hear me 'click' to talk, but no words. At first I thought this was Ventrilo related, but after having Ventrilo shut off, I can still hear myself through my microphone without pressing any buttons.. just a constant stream of my words or those near me.
I've looked all through the Windows XP audio controls and saw nothing related to playback.. so Im completely lost.

Anyone with suggestions?

Using Windows XP SP2. RealTek AC97 Audio soundcard.