I know this isn't much help BUT all I did was to press the red button and it immediately recorded what I was hearing. You can tell it is recording as you can see the waveform.
Otherwise try "File" "Preferences" and try playing with the options there, mine seems to be set to a default of "Microsoft Sound Mapper" which is not actually the sound card which I am using for all other functions I do. (although I am not going to screw around with things that are working well). There is also a record and playback level control at the upper right hand screen.
Good Luck, JohnB