If it was a matter of replacing the headset I would have done so. Not sure how much you know about headset design: but it doesn't seem a terribly great amount.
Two schools of thought: closed ear: Can't hear what's outside (Which is less than ideal, as I like to play music and despise being unable to hear my surrounds to an extent), which is perfect for complete immersion etc.
Open Ear: Sounds can be heard outside of the headset, and also sounds outside can be heard on the inside.
The problem is a simple matter of feedback, input picks up the output, so when I'm playing Counter Strike or Killing Floor, my team-mates are treated to the roar of Kalashnikovs as well as sitreps or instructions.
I know software exists, as I have used similar before, what I was asking was if the Escapists knew of one which is a) Free
b) Relatively Simple to use
My Headset is a USB headset, which may complicate things, however, since it's being manipulated at the software level I'm just going to go ahead and assume it's probably not going to make a big difference.
If you don't know, don't answer. If you do know, you are a legend, I hate installing all manner of software and then having to test it until I find the right one.