Mixer Toolbar has no recording sources
On Vista, recording sources such as microphone, line-in and "stereo mix" are no longer treated as sources belonging to one device as they always were in previous Windows versions, but as individual recording "devices" in their own right. As a result, the Mixer Toolbar dropdown selector will be permanently greyed out and you cannot choose recording sources there. Instead, input sources are chosen at Edit > Preferences > Audio I/O tab in the "Recording Device" dropdown. The input volume however is still adjusted using the input volume slider (by the microphone symbol) in the Mixer Toolbar.
The inputs will be shown in the Audio I/O tab as an appropriate source for each physical device. So if you have more than one physical device (e.g. inbuilt sound and an external USB soundcard), you may have more than one line-in or microphone source to choose from, as in this example:
* Line-In: Realtek High Definition Device
* Microphone: Realtek High Definition Device
* Line-In: USB Audio
* Microphone: USB Audio
* Stereo Mix: USB Audio
Note that the "Recording Device" dropdown can only show devices that are enabled in the Windows Control Panel. If the input you require is not listed in the dropdown, or is not apparently recording properly, try going to the Windows Control Panel to enable and select it (see the next section).