I cant believe its been so hard to get this figured out
Because it's impossible?
Audacity is not recommended for recording Skype, Chat, Conferencing or Game Commentary.
I can probably force that show to work, but I'd be using a talented sound mixing console rather than a handy mixing device.

I think he could fit four people into that sound mixer. Everybody needs to be on headphones and on their own headphone volume control.
Of the four computers in that picture, two are required, one to mess with Skype and the other to manage the "studio" audio and recording. The other two are playing Angry Birds and making a reservation for lunch.
If you want each of the performers in their own feed and recording, you're talking about a multi-channel recorder with good sound isolation in a studio.
Oddly, if everybody was home, this would actually be easier. Everybody, including you, records their
own voice and sends the sound files to you for mixing into a final show. No mixer or craziness at all. One DropBox account, badda bing, badda boom.
The only slime in the game is if you have a guest. In that case you will have to mess with a dedicated Skype computer and separate recorder just for them.
I'm not making that up. We had a recent poster who was doing that successfully until one of the people in the roundtable had messed up their local microphone. That's the downside of this process. It is a bit like marching cats.
In my opinion, you will never get this to work reliably with one computer.
Let us know.
Koz