How to fix: people say they can hear my game sound and their voice echoing perfectly

There is one known reason why your computer can echo your sound to others almost perfectly:

Make sure that your microphone is selected as recording device

Click, Start, control Panel, Sound & audio devices and go in the tab Voice.

Click the "Volume..." button under the recording section, and adjust your microphone input volume and be sure that the Select box under Microphone is selected and nothing else.