Set Up - also see Screencasts at bottom of page

For USB mic:

1) Plug the microphone and headphones in, then launch Nicecast and Skype.
2) In Nicecast's Source drawer, set the first pop-up to Audio Device and then select your microphone for the Input Source. This should be the same device selected in Skype's Audio preferences for Input.
3) Next, open the Effects window, and insert the Application Mixer plugin.