High Fidelity delivers high quality 3D audio that lets you hear other people and sounds (like sound effects or music) with very low latency (the time from when someone speaks to when you hear them), very high quality, and 3D spatialization. A great pair of headphones with a high quality microphone will greatly enhance your VR experience when using High Fidelity.
3D Mixed Compressed Audio
High Fidelity uses a codec designed specifically for VR along with server-side 3D / HRTF algorithms to deliver very high quality audio. Audio bitrate is 200Kbps, with 24Khz, transparent quality. Music, sound effects and voices will all be transmitted without artifacts. Many sources can be spatialized at the same time without increasing bandwidth requirements, due to the streams being mixed in real-time by an audio server that is part of the High Fidelity domain server. Typical mouth-to-ear audio delay is 100 milliseconds.
Sound effects can be played into High Fidelity from the scripting language and can be read from a variety of WAV file formats.
A single High Fidelity server can typically process audio for a group of 20 - 30 people/avatars. A large multi-core system (such as Amazon's EC2 c4.4xlarge) can handle upwards of 100 people at the same time. The architecture of High Fidelity will further allow audio mixers to be combined into a tree, allowing large crowds and nearly unlimited scaleability.
Choosing between multiple audio devices
In the High Fidelity interface client, from the menu, choose Audio->devices to select the microphone and headphone you would like to use. In some cases you may need to restart High Fidelity for the changes to take effect.
When you run your own Sandbox (the High Fidelity server), you have a number of different options regarding managing attenuation levels, reverb, automatic muting, and other settings. To get to these, from your Domain Server settings page, choose the 'Audio Environment' tab.
High Fidelity can also locally playback Ambisonic encoded WAV files, allowing for rich ambient environment sounds. Samples of Ambisonic recordings can be downloaded from the Marketplace.
HMD Microphones and Headphone
The Oculus Rift CV-1 comes with headphones (or optional earbuds) and a high quality microphone that work very well with High Fidelity. You don't need anything else.
The HTC Vive does not come with headphones and has a somewhat lower quality built-in microphone. For best experience, you may want to use a separate headphone and boom microphone, such as the one described below.
A good pair of gaming headphones with a boom microphone is ideally-suited to High Fidelity. Sennheiser has their PC 350 SE's, Plantronics has their GameCom 780 -- there are many good solutions.
A headphone-mounted boom mic, like the Sennheiser rig above, is ideal as it reduces ambient noise and the complications around external mics. In general, the larger the microphone and the closer it is to your mouth, the better you are going to sound to the rest of us.