IBM Thinkpad R51 Audio problem?

Hello
I have problem with IBM thinkpad R51. The is with audio the builtin and external speaker make fedback sound very badly it is windows xp sp3 installed, I have done alot work with sound and video setting I could not fix it. If the volume is halfway then there is no fedback sound. if it is to the max it make fedback. Also when I use mic i hear outside sound as well. Can someone help please.

Regards