The internal mic in your laptop will be limited on how well it will pick up surrounding conversation. It is directional and usually built into the plastics around the screen. When the laptop is open, the mic will be pointed at your face and pick up your voice - that's about all it's good for.
If your using an external mic plugged into the laptops built in jack you may get a little better results, but it will still be limited by the power supplied by the laptop to power the jack.
Some settings can be tweeked to try and improve your results. Try these suggestions first:http://www.youtube.com/watch?v=rgWTF4nk-Sohttp://answers.microsoft.com/en-us/windows/forum/windows_7-pictures/microphone-volume-too-low/3241e6cd-5e01-4a47-a31c-f514b0eefe29
If they do not improve the recording volume, you may need to invest in a hardware upgrade. The right XLR to USB adapter would work wonders. An XLR mic will allow you to get into some professional microphone options more suited to the environment you will be using it in.
Find a local guitar center/sam ash/musicians friend and tell them what you'll be using it for, and they'll be able to show you what you need.
A quick search turned up this: http://www.zzounds.com/item--LEXALPHA