I have had the same problem now for eight months. I am using a Medion laptop and a Realtek sound card. I can play audio from CD/streaming ewtc, but the only listed method of recording is by Mic or Line input. Been and got the latest driver
(Dec2009 release) but it is not showing in Control Panel/Sound. I have worked around the system by using a single to double 3.5 adapter and plugging a short lead from one of the outputs back into the line input (with the external speakers in the other output) and this allows me to record streaming sound.
I do wonder if the Realtek sound card is a proprierty model built for Medion; but I have a USB C-Media sound card and the drivers
load and sound can be played back through it but recording is limited again to Mic/Line input.
Is there some sort of security setting (or registry setting) in Windows 7 which needs changing to allow a sound card to be used for recording? I am now trying to investigate this option. Have not got very far as yet.
Device manager listsd both sound cards as 'Working properly'