Thanks to Jose's video I was able to record a sample conversation with the Skype lady.  I'm going to document everything here for future reference:

Properties for playback and recording were both set to C-media wave device.

Audio repeater settings: in- headset mic   out- C-media wave device

Audacity preferences were both C-media

Skype options were both C-media

Taxonomy upgrade extras: * Class of 2.3