You need to make sure the blue connection is "Line In" and that "Line In" is selected in Windows "Sound" as your recording device. Also,in the BIAB MIDI/ Audio drivers dialog that under "Audio Settings" and then "Audio Drivers" that is selected as well. Do you have ASIO4All ??
The only MIDI that can be directly recorded by BIAB is VST/DXI. An external box will always have to route and be mixed in to the Audio stream.
Jan - Quad Core Intel Core i7 3.4 (clocked to 4.4)
Win 7 64-bit
Samsung SSD Boot drive,other internal and USB drives.
M-Audio Fast Track Ultra
Onkyo TX-SR606 amp.