Ive used audacity much and what i have done to get my realistic guitar sound as good as i ive ever gotten it is to use a regular casette tape deck they are cheap if you do not already own one, and you can plug your 1/4 " mic jack right into it in mono, or stereo if you have two mics you press rec/play/pause on the recorder with any old tape in it (it doesn't matter cause it's paused) and use it's recording level to adjust the level going into your computer's mic in(don't use line in) this may sound a little complicated but i found it to be the best cheap way to record in good quality to adacity and i used a $5 mic. hope im of help :D