I believe you may be the victim of the default Driver
It is unfortunately not unknown for the out of box drivers
for hardware to be without some functionality that is available with the customized drivers provided by the manufacturers.
This is often the case with sound cards, (and on-board chips), where the basic driver supplied to Microsoft for inclusion in the box or on Windows update, is without the "what you hear" type of recording input.
The only thing I can suggest is that you search for a driver from the motherboard manufacturer or chip supplier that provides this functionality. This may actually mean going to a Vista driver rather than the Windows 7 one as most manufacturers will not be issuing Windows 7 drivers directly until RTM if at all. (we all remember the Creative fiasco with Vista