This behavior is seen with onboard video chipsets, it has to do with shared memory between the processor and the video chipset.
You can sometimes solve this with an update to the video driver, but it doesn’t always work.
The best solution is to use the capture module in Showbiz. Make sure that the source is set for “Capture device” and the “audio device” is set for “Audio Pin Source.” and it should just work. Walkthrough Available Here.
If you get an error about the device being in use by another application, make sure that the EZgrabber is closed. If you continue to get this error please consult this FAQ.