I now have it all working. I would like to set the record straight. I had about 6 or 7 emails back and forth to focusrite, they answered everyone of them the next day. I think by number 5 they were trying to explain the system to me, but I did not comprehend. I posted on "seven forums" and received a reply that opened my eyes. The focusrite asio recording bypasses the windows system mixer completely. It does not work like an internal pci soundcard, which is what I was expecting. When realband automatically opened my windows mixer to set record levels and only the mic input was displayed (no spdif, no line,) I thought I was out of luck. If I had gone ahead and played my guitar(spidif selected in realband asio driver input) I would have seen the vu meter reading my input. The reason my windows 7 mixer only shows a mic input is because the drivers for the on board sound don't support it. For someone using a pci card that does not show all of their inputs, this too, is a driver issue for the soundcard.
Thanks everyone for your help. I'm very happy with my focusrite pro 24dsp now.
Bobby...