Hmmm... I think I know what's going on.
I've got an IDT Audio card, and back on XP it had a little panel from IDT I could open up and configure stuff. I actually had to change settings via that program to get my mic to work.
I have absolutely no idea where I got that download, it was a long time ago and now I cant find it at all, let alone Windows 7.
Halp? :o
Search windows 7 programs for IDT