elago E5 In-Ear Noise-Reducing Earphones with Superior Comfort (Compatible iPhone 4, 1G/3GS; Control-Talk with Built In Microphone)

First of all, great design and great sound. This earphone is very very comfortable. Perfectly fit my unusual ear shape. (3 size of silicon ear pad / Small, Medium and Large) Built in controler works great with my iphone4. While I am driving, I test sound quality of microphone. Sound quality is excelent. Easy to answere phone call - on and off control switch - during drive. No need to touch my iphone. Very dynamic bass sound. I am satisfied with over all quality of product. I recomend all. Oh! delivery was so fast.

UPDATE 9/27:
I'm updating my rating from 2 to 3 due to great customer support. When I contacted seller to explain the situation, and that I wanted shipping costs credited as well, they told me I'd be fully credited and need not actually send the headphones back.

So since I still had the headphones, I recently had the idea of trying my old recessed headphone jack adapter (Belkin, needed for my original 2G--again, thanks, Apple) and... with use of that, the headphones actually work for making phone calls. Isn't perfect, and the inline on/off button doesn't work, but generally is fine. For now, anyway, I'm happy that I can use a single set of headphones to move seamlessly from podcast to phone call.
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Even though it was advertised as such, I checked with the seller before ordering to ensure the E5 headphones were compatible with the iPhone 4 when making phone calls, as another 3rd-party product I had (NuForce) was not. They assured me all Elago headphones...Read more

I used this on my iPhone 3GS while listening to music or answering/making phone calls. This in-ear earphone has excellent sound and the bass is pretty good. The microphone is basic but clear during phone calls and is located at just the right distance when you have your earphones on.

The only downside to this product is that the remote doesn't have a volume control. It can stop/start the music, move to the next/previous song and make/answer calls so I am not sure why the manufacturer decided not to include the capability to control the volume. Make sure that is not a big thing for you before you buy it.

Other than that, it is a very good product.