Yes, you need to have a microphone installed for that "other directshow device" option to show your computer microphone's ... I have a Logitech pro 9000 cam w/ microphone build in and it shows there.
But, when you say: "I haven't had audio on my records for a while." , are you trying to record the audio from out side where the camera is installed? or you want to talk to the Microphone and then send to BI and then to Camera outside?
Working on similar project, to have 2 way audio back and foward or it maybe called "Bidirectional Talk"[h=1][/h]
Thanks.