The ini file is called BaseEngine.ini and it's located by default in C:\Program Files\2K Games\Gearbox Software\Borderlands\Engine\Config (at least on a Windows XP system). So the solution is to do a bit of tweaking of an ini file. Not only that, there's no menu option at the moment to turn off the microphone in the game! Worse, even if you've got a button bound to talk on TeamSpeak or Ventrilo of course your voice is still going to be recorded on Borderlands since you can't bind a button to activate speech in the game. If like me you use TeamSpeak or Ventrilo, then it could get quite annoying when you're trying to talk on your voice chat program yet everytime you do it repeats on Borderlands. Turning off the voice-activated microphone Then miraculously you can play games online!ΔΆ. It basically involves prioritising the Hamachi connection over your usual LAN connection to the router.
If you've already got Hamachi it's only a few clicks and then you can host Borderlands games, not on LAN funnily enough, but on Gamespy, using the Hamachi connection (yes it's very strange, I know)! Anyway, some guy here managed to find the solution, and before you think it sounds way too complex and convoluted, it's not. I actually had problems even connecting to friends, not only with Hamachi on the LAN option, but even through Gamespy's Servers (now don't get me started on Gamespy!).
Here are a couple of tips for getting it to work on PC. I tried giving Borderlands a go last night but it took me a couple of hours before I was actually playing it to an acceptable level on multiplayer. I managed to get a whopping 3x new games this week thanks to the release of the 4th Tales of Monkey Island episode, Tropico 3 arriving on Wednesday and Borderlands on Thursday.