Seconding alaingrey -- a delay is normal (5 seconds ain't bad at all!), and if you're recording sound then you gotta not listen to your own stream if you don't want the stream to hear itself and echo it over and over and over. I usually just mute the stream itself rather than muting Chrome!
It sounds like once you're not listening to your own stream, it should take care of most of your audio problems? I've streamed without headphones before (back before I had figured out how to have headphones on and still pick up music), and the sound quality suffers a lil bit but everyone could hear me fine.
Honestly though, as far as headphones, I just use those white headphones that come with iphones/ipods -- they've got a lil mic in them -- and they work fine! Since I'm on a mac, I just run Soundflower to get it to also pick up the sounds I'm hearing (so that it'll play my music over the stream).