Probably the first problem is going to be the Mic-In and Line-Out are different.
Stereo Line-Out is powerful, high-level, and is loud enough to drive headphones. Mic-In is expecting a very wimpy, delicate, mono microphone signal. These two connections are used for video/audio conferencing. Mic-In is very likely to overload and sound crunchy if you cross them like that.
I want to record what is coming out my laptop speakers and also add additional sound.
The first one of those is Recording Sound On The Computer.
The second part is called Overdubbing or Sound-On-Sound. We wrote instructions how to do both.http://manual.audacityteam.org/o/man/tu ... puter.htmlhttp://manual.audacityteam.org/o/man/tu ... rdubs.html