No audio input device? Can't record sound from within speakers.

I have a problem with recording audio that comes out of my speakers. I'm trying to use programs like Audacity or Camtasia to record audio from within the computer itself (ie: a game, etc). But with my new computer I can't seem to get it to work. I always end up getting this error message:

My computer is a Compaq SR5633WM with Windows Vista Home SP1. The only thing I could find about the drivers, etc is that it says "Realtek HD Audio".

I've even checked within the sound settings. All it says for Microphone and Line In is "Not plugged in" with also a little arrow pointing down over the corresponding image of a mic or line in plugs. And there's two plugs in the front of the computer one for headphones and the other is for a microphone.

On my old Compaq XP (we're talking early 2000) I never had a problem with recording sound from within the computer. So am I crazy or can I not record audio that I can hear from my speakers on this new computer? I'm not very technical when it comes to what's inside the computer, but if someone is willing to talk it through I'll listen.

 

Yes, there are plugs for both mic and line in on the back of the computer. But I'm not sure why I would actually need to plug anything into either of those to record pc game sound or any other type of sound coming from playback. I never plugged anything into those on my XP Compaq.