I have a recording studio (using Sonar X1).
You list the ATI Radeo HD4200 as the sound device. That is incorrect, that is only for HDMI audio. The PC audio is what is built on the motherboard, such as RealTek audio. Generally, the integrated PC audio systems do not have ASIO drivers. You can try the free ASIO4ALL drivers but I've had problems with those drivers.
The PC inputs, either microphone or line in are designed for a high level (near "line level") signal, and not the low level "instrument level" from a guitar or P.A. mic. You will need to amplify the signal for proper operation. Actually, buying a USB connected recording interface unit that has "instrument" input is the best option.