When I say dual use I mean it doubles as a webcam, not that you can use more than the mic in this particular game. I hope you didn't mistake my post.
As for the other part my bro was given a headset with his new phone and when used on the PS3 it sucked. When we use the PSE it's so much clearer. The few times I played online with others they sound all muffled and broken up. The Eye uses USB so there's no worry about batteries or a bad connection and you just sit it near your seat and speak normally. Plus since it's not stuck on your head your friends can't hear you breathing.
*I'm pretty sure I used it once with Rock Band but I don't recall testing it on GH. You may want to check to be sure, but I don't see why it wouldn't work.