Sometimes the instructions above don't work. But you can use the Vista recording option in
Replay Video Capture,
WM Capture to record video with sound in Windows 7/Vista/XP.
See the following thread for more information about enabling "Stereo Mix" / "Record What you hear" / "Wave-out mix":
Missing sound recording option "Stereo Mix" / "Record What you hear" / "Waveout mix"