Make sure the volume wheel is turned the right way.
Do you have family settings? if so you may need to change them to allow you to communicate with anyone on xbox live: You can do so in the "Settings" blade on the Xbox 360 main menu then go to "Familly Settings"
Edit your gamer profile Privacy Settings: From the Xbox 360 main menu, Go to Profile > Choose Edit Profile > Privacy Settings. You will find many options that control your communications here.
Maybe your microphone is broken, mine broke once so I borrowed a friends, which worked so I bought a wireless headset which it is worth the money.
The wires may be a bit loose, make sure the end of the headsets wire is in the controller fully, make sure the wire goes into the small piece of plastic at the end of the wire properly and make sure it is in the headset properly.
