Stereo mix (loopback) analog or digital?

[ToddLC]

Recording an Internet audio stream such as Pandora with Audacity is accomplished by setting the audio source to be stereo mix, i.e., loopback. My understanding is that this directs the sound card (or driver) to copy the output destined for the speakers and allows it to be captured as input.

What I am wondering is where this copy occurs. Has the stream already been converted to analog form (as if coming, e.g., from a mic) or does it happen before hitting the DAC so it is still in digital form? I'm curious because if the diversion occurs after the analong conversion it would seem that the digital to analog to digital conversion would cause a needless loss of fidelity.

[ToddLC]

Does anyone know the answer to this?

I suspect the stereo mix loopback is digital because the mixing takes place in the Windows audio engine. The board gets a combined audio stream. So there shouldn't be any reason for it to do the D to A conversion before looping the stream back.

[ToddLC]

I can't believe no one knows the answer to this.

Also, I have a related question. According to Microsoft, with Vista it is possible to do a recoding capture loopback in the OS. A sound call flag enables this. Can Audacity somehow take advantage of this early stage loopback? It would definitely be digital.