You're saying your friend can actually hear echo's? My PX21's show that my mic is making noise when it's off but my friends never say they are echoing. If it is actually your mic making the problems then try turning the input volume (or something like that) down from the mic page thing from the XMB.
Thanks. I shall try that. And yes, he says he can here people talking then theres an echo but he though it was mine. SO he muted the people talking and sure enough he could still hear their echo from my mic.
It must be my setup because ive had two of these in 2 days doing the same thing. But i dont think i could have screwed up on it, its a fairly straight forward setup. Its HDMI btw.