Problem layering

[lessthan22fish]

when i downloaded audacity, i'd click record and it would record one thing, no problems. then i'd click record again, and it would play the first selection, allowing me to layer over it. but after i finished my project, i did the whole Lame thing, and got it exported as an Mp3, but now when i go back to audacity, i can record one thing and play it back fine, but when i record the second thing, it will not play the first. I know this may seem confusing, but i need help because it's happened to me twice and i don't know what to do. One more time: I was able to layer sounds. Then i used Lame and exported a file as an Mp3. I am now not able to layer sounds. I can play 1 back just fine, but can't record over one while it's playing.

[steve]

"Edit > Preferences > Audio I/O"
Make sure this is selected (ticked): "Play other tracks while recording new one"