I had the same problem, and did reinstal drivers many times without fixing problem but i eventualy did fix it. This is what i did:
1. i started instalation of sound max drivers that i allready had and when it asked "reinsatl and upgrade or uninstall' i selected uninstall, and rebooted system
2. next i downloaded net framework 3.0 (don't ask me why), installed it and rebooted system
3. now without sound i downloaded new sound driver (can't remember from where exacly but you can dl from this link as well) from
TopDownloads - Àðõèâû - adi1988a_32bit_510014570.zip
4. Important, before i installed new driver i unpluged microphone from computer and than installed new driver , rebooted system and microphone was working
5. If mic works than you can improve sound by opening sound max (tray icon by the computer clock). On the top of window you have few shortcuts, the 3rd looks like hammer and is called "preferences", click it. Now there are 3 cards to select, you pick microphone and on the right select voice recording, than close that window and click first shortcut called "wizzard" and folow instructions..... nothing more i can tell......
PS: i did step 4. twice, becouse first time i installed new drivers with microphone plugged in computer and when i unpluged it and restarted i got message sommething like "hardware changed, you must reinstall soundmax" and sound max stoped working.
PSS: i didnt mention that i have assus m2n motherboard.
hope this helps