1) Sound Recorder will only record in 60 second blurbs. But you CAN fool it if you try hard. I wouldn't use Sound Recorder though. Go search the net for a simple wave editor like Goldwave.
2) Don't plug into the Mic input on the soundcard...no matter how much you want to. Plug into the LINE IN port. Make sure that LINE IN on the Recording Volume mixer (in windows) is activated and turned up. I'm of course assuming that your source is amplified a bit...no you can't plug a microphone or guitar into the line-in port.