Some Cases that May Prevent You Recording Stereo Mix
1. Stereo Mix
In order to record streaming audio you need to select the "Stereo Mix" input from the "Device Mixer". In some cases this input also may be called as "What U Hear", "Stereo Out" and "Wave".
2. Windows Vista/7
Under Windows Vista/7 the "Stereo Mix" input may be disabled. By default, Microsoft has restricted some recording capabilities in Windows Vista/7. The ability to record from the sound card will be dependent on your system's sound card and driver. It is important to make sure that you have the latest drivers installed for your sound card.
3. Sigmatel Audio
For Sigmatel audio cards "Stereo Mix" input may be disabled in drive. In some cases Sigmatel Audio card may not support the "Stereo Mix" input and will not allow you to record streaming audio. For example, Dell's sigmatel driver does not support this feature. But you can use audio driver from another vendor.