My microphone doesn't work well at all when my iPhone is in my pocket.

Thanks. Just to clarify, I have the phone in my pocket with Apple headphones plugged in, no speaker phone. The mic in the headphones has worked pretty well even with the phone in my pocket. This was til' recently when friends have reported that I am basically inaudible when moving around with the phone in my pocket and connected to headphones. And I think it might be down to some damage to the headphones though I couldn't say why. I tried a new set of Apple headphones and the issue was not there. But I'll keep your recommendation about bluetooth headset in mind, thanks, when I go to the Genius Bar this week.

Sure. If I'm walking and taking a call, I put the phone in my pocket so I can move around and do other things. The mic then doesn't work so well. My question is, why is that and what do I do to solve the problem? Thanks.

You're right, I wasn't clear. I tried to edit my original post now to include this info and can't. Thanks very much for your help.