Assuming you are still connecting into the microphone input of the computer, I suggest you don’t and buy an interface or a mixer that has a line-in, as you are discussing in one of your other topics.
As for the echo, try turning off the microphone or sound card enhancements: Audacity Manual.
If the echo is recorded, set the Audacity recording device to the input you connected to and not stereo mix.
We cannot see your computer. I suggest you follow the suggestions made. Look for sound enhancements and turn them off. Open Device Toolbar and select the input device you are recording from.
Or wait until you have a proper sound device to record into. A computer mic input and computer sound card are often of poor quality and may not have the correct drivers. If you do not have the correct drivers you will get unpredictable results. See Updating Sound Device Drivers - Audacity Wiki.
Audacity just takes the signal you give it. You would be better checking the things I mentioned. And if you have Skype running, you could try turning that off.
Just ticking that audio thru box somehow causes a terrible echo onto the incoming audio signal
It’s not “somehow.” It’s a good bet you are recording all the sound playing on the computer (usually called “Stereo Mix”) instead of just the tape connection. When you turn the Audacity monitoring service on, it adds the slightly off-time monitor sound to the tape sound and you may even get feedback out of the deal.
Do you like to record YouTube or iTunes or other on-line sound? Those Windows and Audacity settings only work for internet sound, not for local tape recording.
We cannot see your computer. I suggest you follow the suggestions made. Look for sound enhancements and turn them off. Open Device Toolbar and select the input device you are recording from.
I’m not a Windows elf, but it used to work by pressing PrtScrn (print screen) key to capture the screen video. Open Microsoft Paint and paste the image. Export as a JPG (jpeg) type of file and then post it on the forum according to these instructions.
When you use the computer speakers, XP probably plays the input through the speakers without you having to use Software Playthrough. If so, that is good, because there is no latency with that type of playthrough.
Even so, if you were recording the echo, something is not correct. You should be able to record from the cassette player without software playthrough being recorded.