I copied this from 'howtogeek.com' which might explain why my sound window shows nothing but my mike. Now I only have to work out if my drivers are too old or too new!
Right-click on “Stereo Mix” and click “Enable” to be able to use it.
I Still Don’t See It…
In some cases, your audio chipset drivers aren’t helping your cause. Most likely, this is because they’re outdated. In other instances, however, it’s because the newest Windows 7 drivers don’t support this feature. This was the case on my Asus Eee PC (a 1000HE), but I got around the issue by downloading and installing the older Windows XP/Vista drivers for my audio chipset. As always, before changing your drivers, make sure create a system restore point in case things don’t go as planned.
How Do I Use This?
With “Stereo Mix” enabled, you can open up your favorite recording program and select that instead of your microphone before you record. If you don’t see the option, or your program doesn’t give you the ability to change the recording device, you can disable or unplug your microphone and make “Stereo Mix” the default recording device.
This works well for when you want to capture audio for a screen-sharing session, or record audio from streaming sources – such as live web-casts – that don’t necessarily allow you to download content immediately. In order to do that, you’d open up your audio-recording application of choice (like Audacity), be sure other recording devices are muted or disabled, and click record. Be sure to check out our article, The How-To Geek Guide on Audio Editing: The Basics, to learn how to use Audacity.
Thanks for perseverance with this, Peter