You can leave this as the default unless you have multiple sound devices on your system. Select an Audio Recording Source, either Microphone or Speakers. If you select Speakers, you will record the audio played by your PC. Click Next.

Select an Audio Format, either WMA or WAV. Windows Media Audio (WMA) files will be much smaller than WAV files for the same quality, but may not be compatible with all players. Select an Audio Profile. Generally, the lower settings are sufficient for voice-only recording, while higher quality profiles should be used if recording music. You can also create your own audio profile by clicking the Custom button. Custom File Formats are available for WMV, AVI and WMA recording. Click Next.

Record Audio Wizard

Adjust recording volume using the slider. Create your audio recording using the Record/Pause, Stop and Play buttons. Use the Play button to preview your recording. Click Next when you have finished the audio recording. Select a name for your audio recording, and choose a folder to save it in, then click Finish.