laptop not picking up sound from headset mic

I have a HP G62 

Program: Windows 7

When I try to set up the headset, it doesn't show the green bars and doesn't record in the recording tool. The earphones work fine though and the microphone works on other computers. 

Also, I'm told that my internal microphone volume is very low on skype and when I record myself, even though the volume is at the highest it can be. When I speak on skype using my internal microphone, I'm told I sound very far and there's background noises that make it hard for people to hear me clearly.

Thanks