Audicity won't Record in Win 7

I had audicity on my previous machine which was XP. Before when you played something through the sound card audicity would record it. I have a sound card I can hear the sound through the my headphones but audicity won’t record. It says there is no input device.

Is there a setting I can change to make it work through the sound card and not an input device?

That works by recording the “Stereo Mix” of the sound card.
Windows 7 may or may not have that option (depending on your sound card and sound card drivers).

See here: