I have NO IDEA what the heck I am doing !!!
I can’t think of a good stupid joke here, so just don’t worry about it.
I have the 10,000 foot (3000M) overview of what you want. Did you already have a lot of this stuff from your band and you thought to use it all between gigs? Good idea. It will drive you crazy for a while, but it should be entertaining when you get it to work.
I can shoot down two ideas right away. It’s almost a certainty you have the wrong analog/digital converter. Your converter is expecting you to plug a computer microphone into the pink connector. The connection is mono and supplies battery to the microphone. It’s not the stereo connection from your mixer you thought it was. I use the Behringer UCA-202, I have two, and I like them very much. I certified them for Perfect Overdubbing when I wrote the original overdubbing tutorial.

That’s my mixer on the right there.
The other problem is using the powerful music system for live mixing. Probably not. If you use a microphone anywhere in the system, you have to listen to your live mix with headphones (note the earbuds in the pix. I know nobody would mix on earbuds, but that’s where you plug in the headphones.). If you try to live mix with a microphone and speakers, you will get the old tracks and the rhythm bed mixed into your new live tracks.
Live voices need the headphones, no question. Most of the time drums, too.

I’m not even sure I posted this in the right place.
Since you have Win8, this is a safe choice.
There is a formal overdubbing tutorial.
http://manual.audacityteam.org/o/man/tutorial_recording_multi_track_overdubs.html
The one sticky problem everybody runs into is listening to themselves in real time. It’s a super good chance you can’t listen to the computer when you overdub. “How come I hear my voice coming back with an echo?”
That’s what plugging your headphones into the UCA202 solves. It’s also a tiny mixer and solves the delay and echo problems.
Koz