No input devices recognized on Win 7 64 bit Home Premium

I have a new Dell XPS 8300 Desktop Intel Core i7-2600 3.4GHz 64 bit machine running Windows 7 Home Premium. After installing Audacity 2.0.0, the drop list for input devices is empty. The drop list to the right of that is also empty. On my old machine using XP I had no problem recording sound off the web using line-in as the input (recording off the sound card). At work, two people with Win 7 64 bit installed Audacity with input devices showing but were not actually able to record anything off the web. Any suggestions?

See here:

Thank you VERY much for your help. I was able to record immediately after following your listed steps. I can now use the BEST audio recording software on my new PC.