Don't expect too much from the microphone. It's good, but it's not... great. The microphone catches your voice pretty well, but if you feel like whispering, for whatever reason, you'd have to hold the microphone pretty close to your mouth.
I tested the microphone both inside and outside. It worked pretty good inside, catching background noises as well and my voice. It was windy outside, so when I tested the microphone out there, all it got was a rushing sound because of all the wind. I did try it out when it was a little less windy, though; it worked okay, although it caught the sound of the cars driving past me, too.
I thought that since Apple had taken the time to add a microphone, they might have fixed up the headphone's sound quality too. Well, they didn't. The sound quality is the same as a set of standard headphones, so if you're buying this product for a better listening experience, look elsewhere. I did like the fact that they added a volume switch, though; instead of having to dig through my pocket and turn down the volume when someone spoke, then shove it back in my pocket, I could just adjust it from the headphones.