This is an additional question rather than a reply (lol).
I have the same problem on a whitebox P4 @2ghz with 256mhz RAM, Windows XP SP1, bottom of the barrel Creative Webcam and generic mic from Staples. I have tried to use Windows Movie Maker and cannot record audio. I used the M$ audio detection util and it says my mic works fine. I have made sure that my audio input settings are at the highest (to compensate for the cheap mic) and determined the mic works by voice chatting on YM several times. I’m using the inherent sound capabilities on an AsusP4V533 MotherBoard. When I run the Movie Maker, all I get is a mild humming sound while watching the movie. Any help will be appreciated. TIA