No sound from Stereo Mix/How to record from headphones?

Hi,I have upgraded from Vista to Windows 7 week ago.I use audacity to record audio from stereo mix.But I am not able to record from stereo mix anymore since I upgraded to Windows 7.Because there is no sound coming from Stereo Mix,it used to work before I upgraded to windows 7,I have searched for solutions,tried installing virtual drivers etc. and it has nothing to do with audacity,I am sure that I have configured it right.I have few questions regarding this problem;

-Is there any way to fix the sound issue with Stereo Mix?

-If not,is there any way to record from headphones with audacity,or set headphones as a recording device?

-Any other ways to record audio I am hearing from my headphones with audacity?

I am using : Realtek High Definition Audio,driver version 6.0.1.5882

Thanks for response.

I don't want to buy anything to accomplish such a simple task,I had so many problems in short period of time since I installed Windows 7,even some major ones.
I have also spotted that microphone doesn't work,while it does on my laptop,it makes some strange noises and records output in really bad quality and it is not recording my voice.

I have tried everything,no use.Could some one guide me on how to format my pc so it will go back to vista.I have tried it via system recovery but I just couldn't do it.I have formatted my pc on vista before,I don't have any vista cds,since pc already had vista installed when I got it.

Have you tried displaying "disabled devices" in the Control Panel/Hardware and Sound/Sound panel? In the Sound Panel, click on the Recording Tab and if the System Mixer is not shown, RIGHT click in a blank area in the Recording window and then click to display disabled devices. If you are lucky the System Mixer will be there and you can then select it as the default recording device.

Yes I have selected to display disabled devices,the problem is that there is no sound coming from Stereo Mix,and microphone is just plain messed up.Out of frustration,I have reinstalled vista,setted everything up and will install Windows 7 on a different partition.I needed a serious cleanup anyway,thanks for your help Jonathan and Fireberd.

Too bad for the reinstall, but if that is what fixes it then I guess it's worth it. Good Luck

i solved it by disabling microphone and stereo green bar started bouncing, i played before with plugin and unplugin microphone though, if it could help