Wow! Great - this solved it for me. Changed from 'Microsoft Sound Mapper' to 'Windows Classic Wave Driver'. Problem gone - so it seems at least. I've had it since version 14 (now on 16) and it has been ANNOYing to say the least.
Use ASIO, or Direct Sound, or HD Audio, but not Microsoft, because it has an ugly problem called latency and may not allow you to record and monitor at the same time.