How to stop mic from picking up audio out

I'm trying to record an audio track for a song using Audacity, and I'm playing the song through my headphones while trying to record my track, but I end up recording both from my mic and what's playing through the headphones. I've tried using Sound Recorder and get the same results, so it's not Audacity's problem.

Long story short, it seems like my audio out is also getting fed into my audio in. Ironically I've been able to find millions of tutorials about how to make your computer do this, but I cannot seem to find a way to make it NOT record from my speakers and my mic. The various settings under audio devices are bafflingly cryptic to say the least, and no where can I find an option that would hint to why my audio out is being fed to my inputs.

Does anyone know how to solve this problem?

simplest solution--unplug the speakers/headphones--while recording through microphone--that said--I understand that you want to 'monitor' what you are recording--this process usually involves an audio mixer (hardware or software) with separate outputs/level controls AND headphones that entirely cover your ears so no sound escapes.
for starters check out the Audacity forums here:

Frequently Asked Questions (FAQ) - Audacity Manual

Tutorials - Audacity Manual

and this article might shed some light on things, although it refers to using a MAC--the principles are the same

Canned; Using headphones for monitoring » Mac Audio Guy

I can't do without the headphones while I'm recording, I really need to hear the music while I record. The mic is definitely not picking up sound leaking from the headphones, it's way too loud and clear for that. When I had vista, this never happened--I could listen to audio and record just from the mic fine (that was the default), so I assume it should be possible on 7.

I had seen the audacity faq, but it's definitely a configuration with 7 as it happens with all my recording software.

I tried digging around in recording devices, but all I can find are options to change the level of my mic and whether it's fed through my speakers. I can't find where the speakers are getting fed through the mic...

see:

Recording Preferences - Audacity Manual

read the section about 'Software Playthrough
"Allows you to hear the input by sending it to any chosen playback device. This permits the recording and playback device to be different."