It is most annoying. It's as if the 3.5mm stereo/mic plug doesn't plug into the jack on the nexus7 all the way; there's no click as it slides into place and there seems to be no detente in the jack engaging with the plug.
When the headset is plugged into the tablet, the sound continues to be emitted by the tablet's speakers, and the headphones continue to be dead silent.
I tried the headset which I had purchased specifically to use with he nexus 7 on my nexus 2 phone and they worked perfectly. I then took the ear buds that came with the phone and tried them on the phone first, where they worked fine, but when I tried the buds on the tablet, I got the same result as the headset on the tablet... Nada.
And the Asus site specifies that the jack is supposed to support stereo with mic. I wrote an Asus support ticket but have had no response, other than their robo-confirmation they got the ticket.
Can someone with their fingers on Asus/Google's pulse find an answer for us? This problem severely limits the places where I can use the tablet, severely compromising my satisfaction with the product!