I suggest you go into control panel and device manager and see if your internal mic is listed there. If it is right click on it and see if it is selected as your default mic. I believe it may be un-selected. If that doesn't work I would just use the external mic with Skype as the internal mics with most laptops aren't that good anyway.
My brother was having the same problems,
U need the exact speech recongnition software drivers for windows vista. The EXACT DRIVERS!
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