This usually happens if you have another program running that is using your sound card, and does not know how to share. Close all other programs besides Vegas when trying to record. Some programs will even run in the background and claim access to your sound card and you will not be able to record. I had it happen, where I went on the internet and was using Yahoo instant messanger closed the program out and then tried to use Vegas and Yahoo was still running in the background and claiming my sound card, so Vegas could not use it. Hit "Cntrl-Alt-Delete and select 'end task' on all non-esscential programs."