Why is my microphone working as a speaker?

I bought a microphone a while ago it's the Philips PH62080. I wanted to use it for my Ipod Touch but it doesn't work for it. Instead there is music coming out of it. and when i go to record a voice it says "please insert a microphone". It works fine on the computer but Why is it working as a speaker when I use it on my Itouch. Also it sort of worked earlier on my itouch but then it stopped working again. Can you tell me whats wrong?