- try to enable stereo mix/input PC option.
- or Control Panel >> Hardware and Sounds >> Sounds. Then click the Communications tab and select Do Nothing. Click Save.
this also did not work for me. I've been trying to fix this for the last two days and it is annoying to not be able to listen to music while on skype
Assuming you're running Windows 7 or Vista, go to Control Panel > Sound > Communication and set it to "do nothing."
See if that does what you want to do.
I did as someone above suggested "do nothing" under communication and it didn't work, but when I did "mute all sounds" it worked - So that is an option too. I couldn't figure out how the other solution worked.