I am using Audacity on Windows XP and, while recording with no noise whatsoever on the 'what u hear' setting, the track looks like this:

Now, I'm no expert, but im pretty sure that those lines are pretty big for no sound to be coming through.
In addition, whenever I intend on recording something, the sound is very hollow and interrupted by the static. A closer look at the above track that is supposed to be silent shows this:

Random interruptions. Any help with this problem is greatly appreciated.