I'll take a stab at this one..... although it has been awhile since I've used Audacity, if memory serves, there was a thing about installing Asio4All as the default audio driver (in Windows systems) to get the program to properly recognize peripheral input devices. You would have to hook up your device to the pc, then choose the device in Asio as the default input, and THEN select it as the input device in Audacity (near the center of the window by the mic icon) and select 2 channel to get a stereo recording track and monitor output. You also had to unselect your device when you were done (as the default) in order for your native sound card to operate normally after your recording session was finished.
I think it has to do with the pc seeing the usb input as a direct replacement for the onboard mic (on laptops) or a stand alone mic input through the microphone input on your sound card...... hence "assuming" to only see a mono audio stream.
Check your settings and advise accordingly.
The Other Pacific Coast Chordian....... Doug (well Okay, Dino counts too, and Jerome, and Tim who is UTL) Edited to Add Rickyjack and DiamondT among the list..... memory failing, is that still a sign of getting senile???
"what is this quintessence of dust?" - Shakespeare