It seems that either Dell or Dell's soundcard manufacturer decided that customers should no longer have the ability to record audio from the web. In the past, I could use a program like Audacity to record Youtube audio tracks, iTunes tracks, sound effects from games, etc. After buying my new Vostro 1700 laptop from Dell, I noticed the "stereo mix" or "wave out" option is no longer available.
After a few hours of web searching, I found a solution. Download the XP driver for the Vostro's SigmaTel soundcard from here:
The driver number is R171789. Run the .exe and upack the files. Cancel the driver installation, which starts automatically after unpacking. Browse to the unpacked files, and open the properties dialog for setup.exe. Choose it to run in XP SP2 compatibility mode, and to run as administrator. Run setup -- the driver should install without any errors or warnings.
Now, open the control panel, open the "sound" dialog, and select the recording tab. Right-click in the empty space and choose to view both disabled and disconnected devices. There should now be a stereo mix item -- right click on it and enable it.