Cant get any sound to record

I just recently bought a Sound Blaster X-Fi XtremeMusic. It was more of a 'just for the heck of it' purchase. Partially because i didnt have a sound card, and partially cause it was 60 bucks cheaper than newegg.
Anyway, my problem is that i cant record sound in games and applications. I can get my team mate speaking on voip, but i cant get any game audio. Help?
SPECS:
Manufacturer:
OEM
Processor: Intel(R) Core(TM)2 Duo CPU E6750 @ 2.66GHz
Memory: 2046MB RAM
Hard Drive: 160 GB
Video Card: NVIDIA GeForce 8600 GT
Sound Card: SB X-Fi Audio [BF00]
Operating System:
Windows XP Home Edition (5.1, Build 2600) Service Pack 2

 

What program are you using to record sound?

 

Im using Wegame. I also tried Fraps, and that didnt work

 

I thought VLC media player might be a good program to record sound play-back through the computer but it won't work. After an hour of changing settings the program still won’t record anything. It has worked in the past and used the same steps as before but what ever you have I got it as well. I am sorry for wasting your time.

 

Ive read that you need to enable 'what u hear'. I did that, and i didnt work. Its strange that i can record the voip speak, but not the actual sounds...