I'm thinking you have one of 2 problems.  Either:

A) You have the "mic" volume muted or turned all the way down in the *MS Windows* audio properties... or..

B) You have the wrong audio input device selected.

Here is what you should do:

Go to Start -> Control Panel -> Sound, Speech and Audio devices -> Sound and Audio Devices

Then select the Audio Tab, and make sure you have the correct input/recording device selected under "Sound Recording"

Then select the Voice Tab, and make sure you have the correct input/recording device selected under "Voice Recording"

Also, after confirming the correct device under each tab, make sure you click on the "Volume..." button below it, and place a checkmark next to the audio input you are using..  "line in" or "Microphone".

If you choose to use the "Microphone" option, then you *might* need to also click on the "Volume" tab and the first "Advanced..." button. Then select from the menu bar... "options"  then "properties"

and select "recording" and click OK.  the Recording control should pop up, and if you are using "microphone" you may want to click the "Advanced" button to set the Mic Boost to enabled (add the checkmark).

Note: If you are using a USB microphone, then you should see an option under the Recording Control for this USB Mic (which will show up with a USB webcam) , and you will haver to select it.

I gave you the long way to get to these places, but if you have the windows volume control in your task tray, you can get to them more quickly by right clicking the volume task try icon.

Finally, when you are sure you have the correct recording device selected, enabled, and configured, you should then check your Skype audio settings, starting with (in Skype) Tools, Options, Sound Devices (on the left) and be sure you have the correct audio in" device selected.

Good Luck.