I finally solved this. I'm going to copy that post here because it will probably help others search and find the solution more easily. You can also see the "Ethernet Device setting for recording??" thread.
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Thanks for all your help with this. I finally solved the problem thanks to help from Alessis -- the company that makes my USB mixer. They received a lot of complaints of this problem on various product lines.
It turns out the Windows7 (and perhaps Vista) USB recording interface has a levels check that I never saw ... and ... it is set way to high by default causing this noise. The gain is far too high. The gain/level value should only be set to around 3 or 4, perhaps 6, not more (per Alessis recommendation). The maximum range is 100, and mine was originally set at 25 (but I understand many computers have it defaulted at 100).
How to get to the (Windows 7) USB Level setting, and reduce to a value that allows you to better distribute gain adjustments in your external hardware:
WIndows 7 (and Vista?):
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1) Open Control Panel
2) Open the Sound control.
3) Go to Recording tab, look for USB input (e.g. "Microphone -- USB Audio Codec"). If you don't see one, start process over with USB interface from external hardware connected. May need to restart system.
4) Right click and select Properties on the USB recording input.
5) Select the Levels tab (may be under Advanced Button)
6) Set the level slider to 4, plus or minus 2. Click Ok. Readjust your external gains.
------- other steps recommended from Alessis --------------
" - Select the Advanced tab, set the Default Format setting to 2-channel, 16 bit 44100 Hz (CD Quality), as applicable
- Un-check the two boxes listed under Exclusive Mode. Then Click Apply. "
Just so this post is more easily searched / found, I'm going to add the following line:
Windows 7 USB NOISE Fix Solved Resolved Problem Solution, Windows 7 USB Recording Noise Fix Solved Resolved Problem Solution