Okay thank you. Just out of interest, why would I need something like Virtual Audio Cable? Like, what is the reason for this limitation?
You'd need that if you did the recording internally to your machine, as it's a way of getting around the OS limitation of only being able to record from a single source. But it's not actually recommended, as it has significant set-up issues, and trying to get it to work reliably isn't easy at all. Also, it isn't a good idea to use this method anyway, as there are additional complications when it comes to recording yourself and sending what's known as a 'clean feed' back to the person at the other end. The way we did it that was easiest to set up was to use an external mixer to which was fed the return feed from the computer (so that's the remote source), and the mic I was using and pan those in the mixer so that each signal was sent to one side or other of a stereo input, and you sorted that out into separate files afterwards. Years ago I created a pdf of how you do this with a small mixer, and you can look at that here: Dropbox - recording_skype_calls_with_audition.pdf
That still isn't brilliant, because there will be a significant quality difference between the two sides of the conversation. The ideal solution is to run Skype for the actual conversation, but get the person the other end to make a 'clean' recording and email it to you. You then replace the downloaded recording compromised by all of Skype's compression, etc with the one you've been sent. It then sounds as though the person was in the studio with you. I've tried this from one side of the world to the other, and it works fine!