Any chance of making that screenshot large enough so we can actually read it?! 
IIRC there is a separate page of level controls for Recording as opposed to the Playback ones you're looking at there. I'm running Vista so am working from memory here but you need to go into the first menu item on the volume control page and choose "Recording" rather than Playback. You should then see a control for the mic.
Andy

IIRC there is a separate page of level controls for Recording as opposed to the Playback ones you're looking at there. I'm running Vista so am working from memory here but you need to go into the first menu item on the volume control page and choose "Recording" rather than Playback. You should then see a control for the mic.
Andy