The noise cancellation microphone (the little hole next to the headset jack) is not automatically disabled on some 4S units when a headset is connected. As a result, it picks up your voice and other sounds as noise and tries to filter it out. After about 20-30 minutes, it totally wigs out.

You definitely want to replace the unit. In the meantime, you can slap a piece of gaffer's tape over the microphone.