First of all, you must install lame. apt-get install lame on Debian-based distributions must do the job. Just after that, this must do the work.
arecord -f cd -t raw | lame -x -r - out.mp3
As the line suggests, the microphone will be recorded to the out.mp3 file. Use alsamixer and press F4 to control the volume of your microphone.
Have fun! And leave comments ;)