How do I output my audio input?

A few iterations ago, I think this was Jaunty but could've been before, I would plug a 1/8" audio cable from the line-out of a Windows netbook to the line-in of my Ubuntu machine, so I would have all the sound from both machines without having to plug both into a mixer which I don't have. I didn't do this much, as I was pretty-much happy with Banshee at the time. But with Karmic, and still with Lucid, I can only get the output if I'm recording with Audacity. Which I'm not going to do from my web-development and systems programming workstation.

I can tell by plugging in headphones that my netbook has audio out working. I can see Sound Preferences that the Ubuntu machine is receiving them. I just want the old behavior back. Help?

If I understand correctly, you're trying to stream the microphone input to the audio output? The simplest I can think of is to use gst-launch for that. Open a terminal and type:

gst-launch pulsesrc ! pulsesink

The press CTRL+C to stop streaming. You may have to install the gstreamer tools to have this available:

sudo apt-get install gstreamer-tools

Note that as I don't have any suitable audio source, I didn't actually try that so it may not work. Any feedback on whether it does would be appreciated.

If you want to use existing pulse-audio tools, use pacat (which stands for pulse-audio cat).

get your input device with

pactl list
[...]
Source #0
        State: SUSPENDED
        Name: alsa_output.pci-0000_00_1b.0.analog-stereo.monitor
        Description: Monitor of Built-in Audio Analog Stereo
        Driver: module-alsa-card.c
[...]

copy the 'name' part and use it with pacat :

pacat -r --device=alsa_input.pci-0000_00_1b.0.analog-stereo | pacat -p --latency-msec=1

where as device is the name you copied before.

This will cost a bit of CPU time (3,3% on my machine).

You can also pipe some audio converting software in between to filter, or use it over the network.

Bruno Girin's answer worked for me as well, but manually launching a process is somewhat annoying as this should just be automatic. A better solution is to install gnome-alsamixer and unmute the line-in option, as described here:

No sound from line-in