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It *should* be as simple as leaving your Windows sound configuration alone, and simply telling TeamSpeak to use the headset for input and output.
However, I know that Windows likes to assume "new" devices are "default" devices sometimes, so it's possible that plugging in the headset is causing Windows to force-change your input and output.
I'd start by making sure the drivers for both your soundcard and the new headset are fully up-to-date (it never hurts to check this).
Then I'd plug in the headset if it isn't already and make sure Windows still sees the Creative card as the "default" for sound output.
Once that's confirmed, launch TeamSpeak and tell it to use the medusa for TeamSpeak output (and for input if it has a microphone).
At that point It *SHOULD* just work.
If you're still having problems, however, there's a voice tuning wizard built into the Sound Control Panel for Windows XP. Simply open the Sound settings from the Control Panel, and look on the Voice tab. Tell it which card(s) you want to optimize (since your headset detects as a sound card) and run the wizard. This will usually help select microphones, unmute them, and prevent non-microphone input (like system sounds being heard by everyone).
Good luck - let us know how it works out.
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