Hi Everyone,
Please see my earlier replies. No functionality has been removed in Windows 7. If you have an audio driver and codec that exposes the hardware loopback, it will still be present on the Levels tab of the Speakers device. However, not all drivers expose this. If you had this option on XP and load the same audio driver, it should be exposed on Windows 7. Same with the stereo mixer. If the audio driver exposes it, it will be available. It is hidden by default on Vista/Windows 7. But on the Recording tab if you right click in the open area and select show disabled devices, you can enable it. If a Stereo Mix device is not shown, then the audio driver is not exposing one. If you had this option on XP, then please try installing the same driver version that was previously installed.
Thanks,
Chris