The mic hangs from the right earphone and I found that it was positioned perfectly in relation to my mouth. Compared to my usual solution of Shure E500s and MPA, the mic is far closer to my mouth, and I don't find myself routing all the cabling to get the microphone in the right place, as I have to with the Shures. The most amazing aspect of the microphone though, is how light it is - you'd honestly be hard pushed to even notice it was there while you're wearing these earphones, which is no mean feat.
There's a single button on the mic unit which will answer and end calls when in phone mode. While you're listening to music, pressing this button will pause/resume playback, while a quick double press will skip to the next track - just like the Shure MPA in fact. This is very basic functionality, but it's also very useful, since you'll have to take your iPhone out of your pocket every time you want to skip tracks without it.
The sound quality from the microphone is impressive too. I made several phone calls from noisy locations like Waterloo Station and Heathrow Airport, and the person at the other end had no problem hearing me. If you are planning on chatting while you're walking though, you should make use of the cable clip, since cable slap will be transmitted.
Talking of cabling, Etymotic has done a good job when it comes to keeping things tangle free. The 4ft cable has a rubberised coating, which seems to stop if getting tangled, even after being stuffed into the carry case. Obviously the 3.5mm plug is slim enough to slip into a first generation iPhone, although it's good to see that Apple has seen sense and dumped that design for the 3G iPhone.
Etymotic insists on supplying its earphones with triple flange tips. I'm not sure who finds triple flange tips comfortable, but I certainly don't. That's not to say that you can't get a good seal with the triple flange tips, just that I wouldn't want to wear them for extended periods. Thankfully you also get a pair of foam tips in the box, which resemble the old style Shure tips, in that they're cylindrical and flat at both ends. The foam tips create a tight seal that improved sound quality over the silicone triple flange tips. A definite plus point is that Shure's foam tips fit the hf2s perfectly, so I would suggest investing in a few pairs of these, since the smooth coating and tapered ends make for a more comfortable experience, coupled with an even better seal.