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So after a trip to bestbuy and Verizon it seems like any wired sets that had volume rockers did not work. Seems the phone does not like ipod controls on the head set.
FMLI read somewhere (I forget now), that if you hold in the centre button when plugging in the headphones the mic works.
I have a set of Phillips ones that works this way. the good news is that it is a software problem so we may get a solution in the future.