I’ll leave your first question to someone else as I’m on Linux and I can never remember what the difference is on Vista and later Windows.
The pan slider only affects the playback level (per channel) and not the actual audio data. Thus you can twiddle it as much as you like and if you move it back to the default centre position it will be exactly the same as if you had never moved it at all. The “effect” is “applied” when the track is “rendered” (either by “mixing down” the track, or exporting), so when you export or “Mix and Render” (Tracks menu) the audio data is changed according to the Pan slider setting.
Please look in Help > About Audacity and give us all three Audacity version numbers that you see.
If you are using the latest 2.0.4 from http://audacityteam.org/download/windows you should have MME, Windows DirectSound, Windows WASAPI (for “loopback” recording of computer playback) and Windows WDM-KS. How many of those four do you have in 2.0.4?