Providing you are not using outboard hardware - there are at least 3 elements of sound structure in a PC. 1)Your audio card or inbed software, 2) Windows OS, and 3) the last is your destination app - be it Sony Vegas. All of them have to be worked in coordination and mapped to one another - or no go.

I did that with Win XP on my current rig. It worked when I upgraded to 8.1 and it works on my dad's Win 7 machine. Some time in there either Microsoft or the company who supplied the drivers disabled the option to record the stereo mix. It's gone on every win 7/8.x computer I've checked on, even ones I've worked with.

:(

I still use Vegas 10 so it's not a Vegas related problem, it's either a driver or OS issue. Wouldn't surprise me if copyright has something to do with it.

"If this is a record 'What you hear' issue, some sound cards/PCs support routing the output to input,,, some don't. Look for 'Stereo mix', 'What you hear', or a similar settings in the sound card's 'Record' attributes

I'm pretty sure "what you hear" no longer works in windows 7 and up (a copy protection thing)

I have the "what you hear" feature and it works with the soundcard supplied software, but "what you hear" no longer shows up as an option in Vegas, Adobe Audition, or Pro tools.

It is my belief that "what you hear" is an analog signal mix that is being directed towards the (analog) speakers, and which is re-digitised by the sound card A/D converter. If that is the case then it would have similar quality to using an external sound recorder and then transferring the signal back into the computer.

My on-board sound chip in my Win 7 machine does not give me the option to record "what you hear", but whether this is a limitation of the hardware or driver, or deliberate crippling, I know not. I have managed to avoid the re-digitisation I mentioned above by playing to my DAT recorder via S/PDIF (a serial digital process) and then playing back into the computer. (I did try connecting the S/PDIF output to the S/PDIF input and then simultaneously playing from one app while recording with another, but no dice.)

"what you hear" feature works with the soundcard supplied software, but "what you hear" no longer shows up as an option in Vegas, Adobe Audition, or Pro tools.
AFAIK, that's a sound card parameter (if supported), the 'what you hear' option would not normally show in the application's audio devices. Have you tried 'Wave Mapper', 'Classic Wave Driver' or other settings in Vegas' "Options> Preferences> Audio" menu.

back in the day, making a training course, i had to physically route the master output back in to an input channel with a cable in order to record my voice AND the audio i was demoing.