Not free, but I like ULead Movie Factory.
The ULead GUI is a little 'unusual' as you found out. Wonder if I have been missing the same checkbox all this time. Doesn't really matter as I don't sit and watch the movie I'm recording anyway and the sound does indeed get recorded in the end.

Nero video program is another with a weird GUI. Hard to find a lot of the features.
Seems the unusal interface problem comes with the territory.


I do not work here, but the benefits are still awesome
Make your sound your own!