IMO about the Test Mic thing: Whippity doo. Test your mic using Sound Recorder or the Recording Hardware GUI in Windows to test if it works. The PS2 Test Mic feature's been broken since Beta or earlier I think.
On the rest: How old is your soundcard? That could definitely be the issue. I ran quite a few different games with some clanmates a few months ago and my old soundcard decided to randomly pitter out and make my mic choppy when connected to the internet. It's not something you can avoid if your SC is out of date. Other than getting a new one, just hope it functions enough to play.
Update ALL of your sound-related drivers.
Test and check the hardware. Is there fuzz or dust in the mic? Is a cord frayed? Is the microphone port on your comp clean of debris?
Heck, open up your tower and check if there's dust at all near the sound card; even inside the tower in general.
If the reason isn't hardware-related.. It's your Internet connection most likely. Which in that case, oddly enough, will let you play but decides to think that transmitting VOIP is a bit too much to handle correctly. Fix for that? Get a new ISP or make sure all your router/modem/cordage is working right. Can't ever check enough.
That's my take on the situation. Hope it helps.
