ISight not picking up audio

Question

I just unwrapped my new iSight camera. Plugged it in, started iChat and was thrilled to see the video come through crystal clear. I didn't do a thing, just plug and go. It was great.
I invited my wife to a video chat. She accepts. I see hear. I hear her. She sees me. But that's it.
"I can't hear you," she says.
No audio coming through at all. So I check the iChat preferences. Yup, iSight is the selected audio input. But no reaction from the audio levels. Slider works fine. I crank it up all the way... still nothing.
So I go to the system preferences under Sound. Same thing. iSight shows up. Slider works fine. No audio input at all.
So I go to the MIDI utility. Same story. iSight shows up. It's clear the computer knows it's there. THe video works, after all. The sliders work fine. But I'm gettin nothing.
It doesn't seem to be the computer.
It doesn't seem to be the cable.
I'm left to think that I got a bad iSight camera (or more properly, a bad microphone).
Please help. What is my next step?
Mac Mini   Mac OS X (10.4.8)   Using iChat 3.1.5

Answer 1

So, in response to the tips left by others on this thread, I took my iSight with me to NYC and tried it out on my wife's MacBook.
Same exact problem.
All the proper preferences are selected. The computer recognizes the camera. Video works. No audio input whatsoever.
Interestingly, the audio input meter in both iChat and System Preferences will once in a while spike and hold, then gradually come back down. Of course, there's no sound coming through the speakers when this happens, and I'm not making any noise that the microphone might pick up. I suspect it's a connection issue, like how bad microphone cords will sometimes "pop" when you twist them in the input socket.
At any rate, I seem to have recieved a bad product and I'll be sending it in for repair (groan). If anyone knows anything more, perhaps something like a recall or a known defect, please post it.
Thanks for your help.
Mac Mini   Mac OS X (10.4.8)