Recently I was trying to record audio from my sound card's playback device, and could not get any software to perform the job. I was googling and fiddling through Audacity's settings without troubleshooting the situation from its root.
Updating my drivers from the PC Manufactor's website presented me with a list of devices in Audacity's available sources that were not available before. Even though my Device Manager showed my devices as being up to date, it was using a Microsoft Proprietary driver for my audio device instead of the more appropraite device available from Dell.
Had I used the original Dell Image from the factory, I am sure this would not have been an issue. But if you are installing your own custom Windows Instance, remember to update all drivers no matter how insignificant the additional features of them may seem at the time.