It may very well be worth checking out both your Skype settings and Windows settings to make sure that neither has become confused about which device it should use to input. To check these:
Right-click the little speaker icon next to the clock and select Recording devices.
Make sure that the microphone is set as Default Device.
Click Tools and select Options.
In Audio Settings make sure that the Microphone displays the correct input device.
Without knowing what you're using as a microphone, or where it is plugged in, I can't really be more specific on what you should expect these settings to be for them to correctly work.