If you’re working in an environment with a noisy background, Skype’s über-friendly automatic gain control can drive you crazy (open up sound preferences and watch your input levels change like magic)
Here’s a fix (that still works in Skype 5):
Open up ~/Library/Application Support/Skype/shared.xml in a text editor, find the
<VoiceEng> section (w-a-a-a-a-y at the bottom), and add
<AGC>0</AGC>. Like so:
<VoiceENG> <AGC>0</AGC> ... [One or more <MicVolume>'s. Leave them alone.] </VoiceEng>
P.S. If you did read the article,
<EC> is the Echo cancellation mode. I like to leave it on, but YMMV, especially if you’re wearing headphones and have no need for it.