Well seems I may have done a workaround fix on this issue, however, still need the help to fix the internal microphone issue. With the external headset/mic (Jabra 220) plugged in to the usb, and by disabling the internal microphone array (IDT High Definition Codec) I was able to get the various applications to pick up the sound. If the internal microphone array is enabled, the external mic works but no application picks up the sound.
Seems the issue is narrowed down, hope someone can make suggestions for the internal mic issue on hp laptops with Win 8 upgrade.
cheers.