First, all my recording is done through an M-Audio Fast Track II USB interface, into Audacity 2.0.3.
With everything set to record in 2-channel stereo, the left channel is getting picked up by the one instrument being recorded. This is normal for the Fast Track interface. The right channel would be for another instrument and/or mic. However, if I record just one instrument, I have to split the track to mono in order to hear what was recorded. When I record in mono, nothing gets recorded at all.
When set to mono, the M-Audio Fast Track II USB interface will send data from the left channel (input 1).
Audacity does not yet have channel mapping (though someone is working on this) so there is currently no way to override this behaviour other than recording in stereo and splitting as you do now.