Yeah if you follow the directions that I posted, you should be fine.
Remember ... When you double click that little speaker by the clock .... the window that pops up is strictly for playback volume adjustments (soundcards outputs). You must select Options at the top and then Properties. Within the properties window, you must select to adjust volumes for recording (soundcards inputs). Then click OK. Now you will be looking at all the Recording (inputs) volume controls. You will now see that you no longer have the mute option. It is now replaced with select, and you can only select one of the inputs. The only inputs you would want to use are Line-IN or Microphone. Really you don't even want to use the Microphone input as the pre amp circuit on soundcards is very poor quality (to say the least). Of course high end cards are a whole different story. They are built with recording in mind. Plain old stereo soundcards and internal sound chips aren't. Thats why the ones that use the lower end soundcards are recommended to use the line in input in conjunction with a decent outboard pre amp of some sort.
What happens when you select "Wave" or "Stereo Mixer" or "What U Hear" (creative soundblaster's name for it) .... the soundcard is mixing everything going through it to the recording circuit. Hence the reason you get bleeding of what you are listening to into the next track you record.
-Ken