I had the same issue. After installing Windows I realized that the line-in port can work quite well as a mic. As long as you're working in OSX, that port ain't gonna work with a mic. You'll have to buy an imic or a USB headset.
Basically the port can work as a line-in OR a mic-in. The soundcard can auto detect what type of signal you're inputting. At least, that's how it works in Windows. Under OSX, a mic just plain doesn't work. It's pretty obvious that apple simple has omitted this feature from OSX. It should really be fixed.
Im quite frustrated about this myself, consider a mic WORKS under windows in that port, using the very drivers that applies provides with bootcamp. weaksauce.
My deepest apologies...it turns out you're right... they DONT work under windows either ... sigh. It's still a really big design flaw imo. But... I already bought the USB adapter so you could say I've surrendered!