I am having this exact problem in Ubuntu 9.04 amd64. I can record the output of rhythmbox (with sound recorder AND audacity) when connecting to the monitor BUT nothing when using the mic even though the mic plays through the speakers.

When I kill pulseaudio and then start it up I see three errors:
Code:
E: module-rtp-send.c: Source does not exist.
E: module.c: Failed to load  module "module-rtp-send" (argument: "source=@DEFAULT_SOURCE@ loop=0"): initialization failed.
E: module-gconf.c: pa_module_load() failed
Is there a package I need?

output of arecord -l:
Code:
**** List of CAPTURE Hardware Devices ****
card 0: Intel [HDA Intel], device 0: AD198x Analog [AD198x Analog]
  Subdevices: 3/3
  Subdevice #0: subdevice #0
  Subdevice #1: subdevice #1
  Subdevice #2: subdevice #2
card 0: Intel [HDA Intel], device 1: AD198x Digital [AD198x Digital]
  Subdevices: 1/1
  Subdevice #0: subdevice #0
output of arecord -L
Code:
front:CARD=Intel,DEV=0
    HDA Intel, AD198x Analog
    Front speakers
surround40:CARD=Intel,DEV=0
    HDA Intel, AD198x Analog
    4.0 Surround output to Front and Rear speakers
surround41:CARD=Intel,DEV=0
    HDA Intel, AD198x Analog
    4.1 Surround output to Front, Rear and Subwoofer speakers
surround50:CARD=Intel,DEV=0
    HDA Intel, AD198x Analog
    5.0 Surround output to Front, Center and Rear speakers
surround51:CARD=Intel,DEV=0
    HDA Intel, AD198x Analog
    5.1 Surround output to Front, Center, Rear and Subwoofer speakers
surround71:CARD=Intel,DEV=0
    HDA Intel, AD198x Analog
    7.1 Surround output to Front, Center, Side, Rear and Woofer speakers
iec958:CARD=Intel,DEV=0
    HDA Intel, AD198x Digital
    IEC958 (S/PDIF) Digital Audio Output
null
    Discard all samples (playback) or generate zero samples (capture)
my sound card
cat /proc/asound/cards
Code:
 0 [Intel          ]: HDA-Intel - HDA Intel
                      HDA Intel at 0xfe7f8000 irq 22
 1 [HDMI           ]: HDA-Intel - HDA ATI HDMI
                      HDA ATI HDMI at 0xfe8fc000 irq 17
output of lspci
Code:
00:00.0 Host bridge: Intel Corporation 4 Series Chipset DRAM Controller (rev 03)
00:01.0 PCI bridge: Intel Corporation 4 Series Chipset PCI Express Root Port (rev 03)
00:1a.0 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB UHCI Controller #4
00:1a.1 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB UHCI Controller #5
00:1a.2 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB UHCI Controller #6
00:1a.7 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB2 EHCI Controller #2
00:1b.0 Audio device: Intel Corporation 82801JI (ICH10 Family) HD Audio Controller
00:1c.0 PCI bridge: Intel Corporation 82801JI (ICH10 Family) PCI Express Port 1
00:1c.4 PCI bridge: Intel Corporation 82801JI (ICH10 Family) PCI Express Port 5
00:1c.5 PCI bridge: Intel Corporation 82801JI (ICH10 Family) PCI Express Port 6
00:1d.0 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB UHCI Controller #1
00:1d.1 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB UHCI Controller #2
00:1d.2 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB UHCI Controller #3
00:1d.7 USB Controller: Intel Corporation 82801JI (ICH10 Family) USB2 EHCI Controller #1
00:1e.0 PCI bridge: Intel Corporation 82801 PCI Bridge (rev 90)
00:1f.0 ISA bridge: Intel Corporation 82801JIR (ICH10R) LPC Interface Controller
00:1f.2 SATA controller: Intel Corporation 82801JI (ICH10 Family) SATA AHCI Controller
00:1f.3 SMBus: Intel Corporation 82801JI (ICH10 Family) SMBus Controller
01:00.0 VGA compatible controller: ATI Technologies Inc Radeon HD 3870
01:00.1 Audio device: ATI Technologies Inc Radeon HD 3870 Audio device Note: This is my video??
02:00.0 Ethernet controller: Marvell Technology Group Ltd. 88E8056 PCI-E Gigabit Ethernet Controller (rev 12)
03:00.0 IDE interface: Marvell Technology Group Ltd. 88SE6121 SATA II Controller (rev b1)
05:03.0 FireWire (IEEE 1394): Agere Systems FW323 (rev 70)