From eurogamer.net:

The quality of sound that comes through Xbox 360 headsets will be significantly improved when Microsoft updates the Xbox 360 this Fall.

The refresh, designed to coincide with the launch of Kinect, will upgrade the codec and audio infrastructure that underpins the quality of voice communication from Xbox 360 to Xbox 360, and should make for clear chat between gamers when they play online, Xbox Live Studios boss Jerry Johnson said at the Edinburgh Interactive Festival this afternoon.

"The codec we used when we first launched was a low bit rate codec and we stuck with that," Johnson explained.
Full Story: eurogamer.net