To those with a similar sound scenario, I eventually found a combination of settings which solved microphone and other problems.....
In volume control/ edit/preferences „Channel Mode“ activated and set to 2 channels.
Settings under System/Preferences/Sound also changed, see screenshot...
http://img408.imageshack.us/img408/7...erencesso6.png
Thanks for the assistance.Sound in Ubuntu, in my opinion, is too much hit 'n' miss, many other people have had similar problems, just check out the forums!