Hi

You need to enable the Stereo Mixer which is probably disabled in the Control Panel,  Sound settings see images below

Right click the blank area below the existing recording device and select the options shown.

You can also get to the above dialog by right clicking the speaker icon in the systray bottom right of the desktop window and selecting Recording devices

NOTE: make sure you turn off the computers system sounds when recording via the stereo mixer otherwise you will get beeps etc recorded as well.

HTH

John EB