I found this on the Turtle Beach website:
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If you or other players hear echoes in Live Chat:
Does it happen if you use the Microsoft communicator?
Mute the microphone on your headset. Does the echoing stop?
In the Xbox Dashboard > Settings > Live, set the voice to Play Through Both and unplug the talkback-controller cable. Does the echoing stop?
Echoing can sometimes be caused by high latency ("lag") on your internet connection. This may come and go depending on how much bandwidth is being used in your area.
If your talkback-controller cable's plug gets dirty, this can also cause echoing or static. Also check the input jack on the controller and make sure no foreign objects are in there.
Read these links for more advice:
Echoing can be caused by "a poor connection between the headset and the controller."
http://support.microsoft.com/kb/912493
"The most likely cause is either a plug that isn't pushed all the way in, or gunk on the plug."
http://xboxelle.spaces.live.com/Blog/cns!1pUP4M-J1d781v7Ac0Ta8FDw!158.entry
"If you hear echo, then... someone in the chat session... needs to clean off their metal headset plug."
http://majornelson.com/archive/2005/12/25/get-rid-of-voice-echo.aspx
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