How do I choose a wired headset whose buttons work?
I use an Android specified Headset with 3-button for my Nexus. Works brilliant.

Not only does it deliver 3-button action, but also very good sound and a really hard hitting bass. Anyone enjoying Rock or Electronica will not stop listening ;-)

The headset is specifically made for Android's lower voltage spec from Google and will NOT work on an iphone (the way I like it).

3-button Android spec headset with flat cable
Sabotage Royale from Degauss Labs

Webpage: http://www.degausslabs.com

Edit: 3-button headsets. 
I hope anyone reading this debate understands there are Android hardware spec headsets and iPhone hardware spec headsets. They dont change in hardware or technical specifications just because you start using some software app.. (Just make them more programmable). 

So if you are an Android user you should use a 3-button Android spec headset. A 3-button iPhone headset will not work 100% (up down buttons etc) and most likely the mic dont do the proper job making whom you speak to hear you bad or "from far away" or "talking in a coke-can". There are 100 times more iPhone spec headset out there, dont ask me why.