When I do a sample of my voice (or anything being recorded through the physical microphone) it sounds perfect. So I guess it's to do with audio volume levels.
I've messed with these volume settings and nothing seems to make a difference. Lowering the volume just makes everything quiet, and the static is still there. Any other ideas? What makes it frustrating is that FRAPS performs this same operation seamlessly and with no problem whatsoever. I don't even need to enable stereo mix.
I've even tried unmuting the microphone slider on the first image, but it changes nothing and if anything - makes it worse. I've even tried setting everything to the same volume - but nothing.
I made another discovery. Since reinstalling the HT drivers yesterday - Even if I disable stereo mix, I have a strange issue whereby I'll be playing music, then if my Skype program bleeps from receiving a new message, or any other sound comes through - my music will mute, and after the sound byte from the program has ended, the music will return but in lower volume, without me changing anything.