How to test a usb microphone

Plug in the microphone, select it in the "Input" tab of "Sound" system preference, move the "Input volume" slider to the right, and talk into the microphone. If it is working you will see the input level indicators flash. If you want to hear it, you will need an application to copy the audio input to output, such as LineIn
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I tried to plug it in and set the in-put sound to "line-in" and it wouldn't work.

'Line in' is the analogue audio input socket on your machine. The microphone should appear as a separate source, either by its name, or possibly as something like 'USB Audios Device'. Then proceed as Raymond suggests.

See if it shows in the USB section of System Profiler (Utilities folder). Are you using on of the computer's USB ports? A keyboard USB port may not provide enough power.

It may mean it needs a driver (software): you need to check with the instructions and/or the manufacturer's site whether there is one.