Yeah, as I have said, headphones are better.
"On a side note, £150 "gaming" headsets have very inferior quality when compared to the JVC HA-RX700, for instance." - The resident audiophile on another forum I frequent.
I took that advice, £30 for the headphones, and I definitely do not regret it!
The mic I am using is a Speedlink one, think that was like a fiver, very clear.
Look at brands like JVC, Panasonic, Sennheiser, if you're rich then Bose too. Generally you can get surprisingly high quality audio from 25-50 quid headphones, if you pick the right ones.
Don't forget to have a good soundcard though, ideally one with a headphone amp, some sets require them... and yes, as someone else here said, plug directly into the soundcard. Less interference that way!