Thank you, Krusher, for your response.
I am afraid it did not help me. Perhaps I should have made my post a little clearer. The programs that I have can record anything that plays through the sound card. You can find many such programs on the net. I mean, anything - be it streaming audio from the internet, or audio that I have locally stored, and so forth. The program either saves the audio as .WAV files or encodes them on-the-fly to MP3.
I know this because I have done this countless times. My problem started after a system crash, when I had to reformat my hard drive, re-install the OS and the drivers. I thought I had put everything back where it belonged, and even got the updated drivers for the MoBo and the sound card from the manufacturers' websites. But still I am unable to record audio in the manner described.
I hope someone can help me with this.