What is the microphone in ear buds for?

prior to the just released 4th generation iPod touch, there was no built in mic so anyone wanting to use voip phone apps and audio recording/editing apps were unable. the iphone never needed one and since they both share the same app library the microphone ear buds were the only option for 3rd gen iPod touch users to use those apps. simply plugging a mic into the jack would not work because there must be a separate line in the cord for the mic plus a line for left and right speaker (3 separate lines) otherwise the iPod will not recognize the input.