You could also put in a headphone jack, which would be nice because the headphones on these USB headsets are far from "quality". It would allow you to have multiple outputs each with there own level adjustments.
At this point setting up a breakout box starts to become appealing. Although you would probably also want an inline level control as well. Doing it thisway will allow you to use the headset as a vocal mic while your recording the instrument at the same time. Another would be to place an actual SPST switch inline with on of the headset mic wires allowing you to turn it on and off. When placed inline with the mic it will effectivly disable the mic when an instrument is plugged in. One workaround here is to use a stereo input jack as a switch. its raising the volume of the headset mic as well, to the point your picking up useless ambient noise.
GIGAWARE DRIVER FOR USB HEADPHONES SOFTWARE
The outcome of this setup is that when you turn up you mic volume in the software not only does it raise the volume of the instrument. I'm guessing this is because you left the headset mic wired in parallel to the input jack. which should not exist when you are plugged straight in with your instrument. On the recording you posted there was obvious background noise. I would like to offer some possible additions however. I have a sneaking suspension this will give as good a quality as any of the cheaper USB audio interfaces available for easily half the price.
we need to try to get it to featured status. DUDE! This is an awesome hack/Instructable.