When you say Windows 3.0 I assume you mean Audition 3.0?
Realtek interfaces are made from about 25 cents worth of components and are never going to give you very good recordings. Do you have a mic plugged into the socket on your laptop? If so, that'll be the hiss--the pre amp on the Realtek is really only suitable for things like Skype calls, certainly not any serious recordings.
As for the fading, have you shut down/turned off every other user of the sound card on your laptop? One of the drawbacks of inbuilt sound cards is that they can be "grabbed" by anything else that thinks it needs to use it, including every little beep and bong generated by Windows
Realtek ASIO? Unless there's a VERY recent change, there's no such thing and that'll be why Audition can't find it. You have to use device class MME to use the Realtek directly-- or that's where Asio4All comes in. It's not true ASIO but it sits between your computer and MME devices like the Realtek and fools the system into thinking it's dealing with ASIO.
So...
-shut down all other sounds on your computer
-accept that the mic input on a Realtek is utter crap and full of hiss
-either use MME or Asio4All
-In the longer term, seriously consider a "real" external interface. At the most basic level they're cheap and they'll make an unbelievable difference to your quality.
(Worth saying that none of this has anything to do with Audition. It just accepts whatever data is being provided by the sound card.)
