How to Record both Mic and Speaker Audio in Windows 7

I am wondering how would I be able to record just the audio coming out of my speakers, or in my case my headset, and the audio coming into my mic at the same time? I do not want to record any video. I am currently using Adobe Soundbooth as my recording software, but am comfortable with any recommended software.

Right-click your volume icon, and select "Recording Devices".

On the "Recording" tab, right-click your mic, and select Properties.

On the "Listen" tab, select "Listen to this device", and ensure the proper playback device is chosen.

You should now be able to hear your mic through the speakers along with other audio, and it should be recorded along with everything else when you record "Stereo Mix" or alike.