To record streaming audio from the internet using Audacity and Windows 7, do the following.

1. Go to "sounds" in control panel. Control tab around to the recording tab. Go to the list of recording devices. Probably only "microphone" is shown in this list. Press the context key and go in and enter on "show disconnected devices" and make sure it is checked. Do the same for "show disabled devices, that is make sure it is checked. Now, "stereo mix" should appear in your list along with " microphone" highlight "stereo mix" and go in to the context menu again and enter on "enable". Verify that it is enabled by going into it's properties and selecting "use this device" tab to ok button and enter.
2. Now, in Audacity, go to preferences by pressing control p. Up or down arrow to "devices" tab once to "interface host" and choose "MME" tab to "playback device" and choose "speakers" tab to "recording device" and choose "stereo mix" note: choosing "stereo mix" turns off the built in microphone and/or microphone input on your pc. Jaws and the streaming audio are the only things being recorded. If you want to record using a microphone you have to go back into "recording deviced" and select"microphone" this worked for my Real Tech sound card on a Windows 7 machine.
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