I tried going into System Preferences, Sound, and Input and making sure the "Internal Microphone" is highlighted but it still won't work. No one can hear me in any Skype calls I make.
Skype uses a separate audio configuration that can be different from the main system configuration. Go to Skype Preferences, then "Audio/Video", and check the settings there.
Make sure Skype is actually installed: don’t run Skype from the download image.