If you have a Windows 98 computer, press "Start", "Settings", "Control Panel". Then double-click on "Multimedia". You will see a properties page with 5 tabs across the top. On the Audio Tab, playback and recording devices are listed. If no recording device is listed, click on the down arrow on the right hand side of the list box. Are any devices listed? If so, select one and try to record.
If the recording device is "greyed-out", you may have a hardware conflict or device driver problem. A hardware conflict means that two computer devices are trying to use the same computer resources (interrupt, memory, Direct Memory Access channel, or Input/Output Address). A device Driver is the program that interfaces the sound card (or other device) to the computer.
Close the Multimedia Device Properties window and open "System" in the Control Panel. Select the Device Manager Tab and look for any Yellow Exclamation Marks or Red X's. A red X means the device is disabled, a yellow exclamation mark means that there is a hardware conflict. If you have a conflict or disabled device, post some more information about your computer (sound card type, what devices show up with conflicts or as disabled, what devices show up in the Control Panel-System under Sound, Video and Game Controllers) and I will try and help you troubleshoot.
If you have no conflicts, you may need to reinstall your sound card driver. If this is the case, let me know and I'll try to help you reinstall the driver.