Suddenly Can't Use Microphone or Speaker for Recording

Help! I consider myself to know a little about pc's and related peripherals, but I'm stumped on this. Sometime over the last 30-60 days, my pc lost the ability to recognize my microphone and speaker. I don't exactly when because I don't use them often. However, I wanted to make a recording about three days ago and started getting a message that stated:

(Apologies in advance for long post, wanted to save time by letting you know what I've done or found already)

"Another application is recording audio. Stop recording with this other application and then try to record with Sound Recorder again." - This shows up everytime.......I am not aware of any other applications that could be using it and I've looked all through my task mgr and don't see anything open in there that looks like it would be associated.

When clicking on the sound control in the toolbar on desktop and opening the NV Control Panel, I find the following problems:

For Recording: There are no active mixer devices available. To install mixer devices, go to Control Panel, click Printers and Other Hardware, and the click Add Hardware.

For Volume: No Audio Device - everything is grayed out.

For Audio tab, Sound Playback: Default Device is Modem #0 Line Playback.

Sound Recording: Default Device is Modem #0 Line Record.

The same appears under the Voice tab for Voice Playback and Voice Record.

Everywhere I look it appears that, even though both are plugged in and were working at some point, my system is not able to recognize they exist. This has driven me nuts trying to figure it out for the past several days. I've used Norton System Works to see if it can identify them, it too indicated nothing was installed.

Obviously I did something somewhere, sometime, somehow to screw this up. Can somebody help walk me through recovering these? I'm not sure what other information to include, so please let me know.

Thanks-
Desperate

same thign happened to me... use system restore

If the restore doesn't work, reinstall drivers.

Also check: admin tools > services > Windows Audio