Did you try the drivers from the Asus website rather then from the install disk?
Xonar_DG Drivers
Make sure the front panel mic option is unchecked in the sounds option of the control panel. When I installed mine that option got enable for some reason and the mic wasn't working
I am using un official drivers for my creative sound card as official are not fully supported by win 7 64bit.
awww gutted dude, i'd drop asus an email, sounds really strange, is it the exact same problem?
Hey mate, I feel your pain...I HATE sound card problems! They're very hard to troubleshoot without being on the pc directly too.
Looking at your screenshot, your line-in is 'ready' and has the little volume squares to the right so that's working, but as far as I'm reading, that soundcard seems to have only the one input which covers both line-in and mic (one or the other). Have you tried disabling line-in?
Another thing to try is to plug a set of headphones into the mic socket, in case it's a problem with your mic, and see if you can get any volume response (you probably won't be able to hear it if it does work but you'll see the volume level jump up a green square or two).
What type of mic have you? And is it mono or stereo? Is the input jack for the same (mono or stereo)??
We fixed it