In recent versions of Windows, this is usually done via the recording properties control panel, which can be accessed by right-clicking the speaker icon in the taskbar and selecting Recording devices. Within the Recording devices panel, click on the image of the microphone you are using and then click Properties. In the properties panel, there should be several tabs. In the Levels tab, make sure the microphone level is turned up to full. If there is an Enhancements tab, make sure to select “Disable all enhancements”. In the Advanced tab, select two-channel 16-bit 44100 Hz (CD quality) as the default format. If you see checkboxes that say “allow applications to take exclusive control” and/or “give exclusive mode applications priority”, check them both.
For Windows Vista, follow the instructions here. For Windows 7, follow the instructions here.