I just started using this app last night. I need to find the best solution as far as a headset goes. It is tough to just use the Nexus naked as it is nearly impossible for me to have a normal conversation. My other party said there was echo and lag. I really am hoping that I can get this to function as designed so I can dump my cell phone and just use a Hotspot.

Two settings I'd recommend setting would be Keep Screen Alive from under troubleshooting and the Basic Echo Canceler from under the audio/echo settings.  The nexus 7 by default puts wifi into a power saving state when the screen is off.  Keep Screen Alive would prevent that.  And to remove echo the Basic Echo Canceler should help.