Click Option button in main window of Power Audio Recorder.

If you could not find Stereo Mix,click Options->Properties menu. 

Select Recording ratio and check Stereo Mix in Properties dialog. 

Check Select checkbox in Stereo Mix item of Wave In dialogl. 

For each recording-input, you will notice a Select checkbox and Volume slider. If you want to record from Microphone, check the Microphone Select checkbox. If you want to record from Line-In, check the Line-In Select checkbox. If the recording volume is too low, turn up the appropriate Volume slider. 

Sometimes you may wish to record streaming audio. Many modern sound cards present a recording input called Wave (Stereo mixer) that may work. Several sound cards also offer a recording input called "What U Hear" or a similar name,that records anything that can be heard over the computer speakers.