I use and love it as a microphone since it doesn't require me to have anything on my ears. If I'm too far away from it, some people complain that they can't hear me, but that might be because of the echo. It can and will pick up background conversations, so use it in a room where you are alone.
In chat rooms, you can use it as a mic and camera. Other people don't need to have a camera to see your feed. You can turn off your video transmission while still broadcasting your voice. Picture quality is great with proper lighting and bandwidth. My friends often have other people in the room with them (gfs, siblings or parents) who are cool and since the mic can pick up all of their voices better than a headset, we all converse and have fun together.
The current PSN games that use it are great tech demos (and fun for a time) of what the gaming potentials are.
It really quite a piece of hardware.
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