This is going to be long, but I think it describes the problem well and what I have done. Ok, this started yesterday. I'm not sure exactly what caused it, but the only thing I had done with it that day was to plug it into my cars stereo through the dock input... something I have done quite often. It's a cord, essentially like what comes with it that you use to connect to the computer, with a mini jack on the other side. So, my friend calls me as I'm driving so I unplug it and then slide to answer, but no matter what I say he doesn't respond. I just blew it off thinking it was because of bad reception or something. Well, same thing happened today 3 times with somebody else (he called me, I called back then he called again, couldn't hear me). Went up to AT&T and they again tested and failed to hear anything from my side. It won't work with a bluetooth headset, the headphone/microphone accessory or (of course) with just speaking through the phone. NOW for the strange part. When I'm not in the 'Phone' "app" the microphone picks up everything. Such as, TapeMe or Voice Recorder. It will record what I'm saying no matter what I use. -I've restored the iPhone and then set it up as a new phone and also restored from 2 different back ups... all 3 times the same thing happened. -I've cleaned out both the dock connector input and the headphone jack. -I've plugged in/unplugged the headphone jack, tried the same thing with the dock input just in case. -Yes, I have made sure I didn't hit 'Mute' or have my finger/hand over the microphone. Do any of you have ANY clue what might be causing this? I'm going to call up Apple tomorrow and see about getting a replacement, since AT&T can't do anything, not even give me a loaner phone. It just makes no sense why it would work in a voice recorder application but not the phone, since the voice record app (I would think) verifies there is nothing wrong hardware wise... but since I have restored the phone using a backup and as a new I don't think it could be software. You can now add "Downgrading to 2.0 to check to see if it changes", did absolutely nothing. In the process of updating it to 2.2 then probably giving up.