After much futzing around on the net reading so many disinformated posts I finally figured this out. Basically Apple changed the line-in to actual line level, rather than mic level. This has nothing to do with supplying power to the mic as some people have incorrectly stated on the web. Rather its about the signal level coming from the mic not being strong enough. If you run a cable from a line level output such as from an iPod, it will work fine.
That being said, it seems that this has broken many people's possibility to use a mic headset.
However, it also turns out that the actual headphone jack on the MacbookPro that I have appears to recognize my iphone headset mic that has stereo+mic on the same jack. Plug that type of headset into the headphone jack on the MBP and then set the input to built-in mic. If the headset is plugged in it will use it, if not it will use the internal mic on the MBP.
Works like a charm now.
A USB headset is NOT necessary.
So the only hiccup is if you have an older headset where the mic and headphones are separate cables, then that won't work on the MBP anymore. You'd have to get some kind of Y cable possibly to make it work. But there are numerous headsets designed for phone use, such as the one supplied with the iphone, that work exactly right with MBP. And those are actually a lot more compact to stash in your laptop bag!
I rather like this setup more than before, but its not documented well. Tell a friend, there are a lot of frustrated people on the net talking about this problem.
