Do you use DirectSound or ASIO? If the former, then the delay (playback buffer size + input buffer size, with the default settings it is 600ms) is unavoidable.
I use Direct Sound in WinXP. Each 600ms or 300 + 300 ?
You can check buffer sizes:
Playback: Settings->Playback->Devices, check the Main and Monitor sound card (if used) - the bigger number determines the latency.
Input: Settings->Input, click Advanced, see the DirectSound Input Prebuf (default is 0.09 sec, which is 90ms).
You can reduce the latency, but you can't get rid of it when using DirectSound. Either upgrade to Windows Vista or newer, or use ASIO (ASIO4ALL if your sound card doesn't have native ASIO support).