To ensure that both your speakers and microphone are working correctly you will need to run the Audio Set-Up Wizard (an 8 step process). You should also rerun the Audio Set-up Wizard if you change microphone, speakers, or are having problems with the audio during an Elluminate Session.
The wizard is located in the tools menu under audio -> Audio Setup Wizard. All you need to do is follow the instructions on the screens that come up.
This is a tricky part. If your computer has a built in Microphone and you want to use it choose "Built-in Microphone." Choosing "Built-in Input" will allow you to use a microphone you plug into your computer.
By this point you're done with the setup and should have sound playing through your speakers and other will be able to hear you speak during conversations.