I have the same problem with an Acer Aspire 5542 and Ubuntu 10.10 and Gnome
Using 10.4 I was able to talk into microphone, now I cannot have in work.
I tried using Alsamixer but when the microphone seems to be active (I can hear my voice out of speakers), Audacity or recorder give no signal.
The main problem seems to be that its behavior is absolutely erratic (suddenly it worked for some seconds in Audacity, then opening skype, it stopped).
lshw -c sound gives exactly the same result as the last post