To mirror the sound you need to run several instances of Audio Repeater (Start -> Programs -> Virtual Audio Cable -> Audio Repeater). When I say something like VAC1 -> VAC2 that means the Wave Input is VAC1 and the Wave Output is VAC2. Buffer length and Buffers are clearly labeled so I won't explain that, just use what I tell you to use.
This shit may seem difficult at first but don't worry, once you set it up once it'll take five seconds for you to do again.
Things you'll have to do/know no matter what the case
This stuff can be found in Control Panel -> Sound and Audio Devices -> Sound Tab
Sound Playback Default Device: VAC1
Sound Recording Default Device: Your microphone
All Audio Repeater instances should have 200ms latency and 16 buffers (try 100ms latency first, but if you notice skipping go up).
Case: You want to record Skype audio, emulator audio, microphone audio (assuming you can't explicitly set your audio device in the emulator)
This stuff is found in Skype Properties -> Sound Devices
Skype Input Device: Your microphone
Skype Output Device: VAC1
Audio Repeaters:
VAC1 -> Headset/Whatever your headphones are plugged into (what your Windows Output Device originally was)
VAC1 -> VAC2
Microphone -> VAC2
Diagram of what this would look like in real life with cables:
Summary
You should be recording from: VAC2
The product of VAC2 is your Speaker audio and Microphone audio mixed together. You can set that as your recording device in Camtasia/Audacity or whatever and get great quality audio of everything. The VAC1 -> Headset is so that you can actually hear what is playing out of skype and your emulator or whatever. You can change the volume of VAC1 in the windows sound mixer, however, unless you want a slightly more complicated solution, this will also change the volume of your guests on skype.
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Case: You want to record your emulator/speaker audio alone but can't (with a simple step to add microphone!)
With default audio out device set to VAC1, and default audio in device set to VAC2-
Audio Repeaters:
VAC1 -> Soundcard output
VAC1 -> VAC2
[Optional Step if you want to record microphone also]
Microphone Device (whatever your default recording device is in Sound and Audio Devices) -> VAC2
Summary
You should be recording from: VAC1
The first Audio Repeater is open simply so you can hear what is playing through your system audio. There should be absolutely no latency when you record like this except for very minimal if you add your microphone to the mix. This is the configuration you want to use to get everything if you don't have guest commentators. In the last case we repeated VAC1 -> VAC2 so that they would not hear themselves in the Skype conversation.
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Stuff to note:
You will want to restart all programs that you expect to get Audio from after this. In Camtasia, you will want to set your recording device to whichever one I recommend in the case and then click Manual Input Selection and choose Line In.
If you find that the latency is bad after you record, try shifting the sound over in Camtasia by 200ms or so.
When you are done recording don't forget to set your Windows and Skype sound devices back to normal or you won't be able to hear shit.
If you are confused about any of this or want me to make some more cases (for example, I use 3 VACs and record Skype/Microphone audio and Emulator audio on seperate tracks) just feel free to ask.