OK I have this figured out.
So the problem is simply one of audio drivers. Record is set up to use ASIO drivers, which if you have a Windows box, is probably not installed.
The good news is that there is a really good free ASIO implementation you can install, and never have to worry about again.
Once that's done, start up Record.
You'll get a new document.
Click on the Edit menu, then select "Preferences"
In the "Audio Card Driver" selection box, you should see "ASIO ASIO4ALL"
Select that, then close out that dialog.
You should see signal coming in on the transport monitors.
I'm at work right now, so I can't really sing into the thing, but I will when I get home.
Someday we'll win this thing...www.aclosesecond.com