Hiya Matey
My recording device is also greyed out but I've got mic, line-in, cd audio and mixer available under the Recording Source, which, I guess is something like you should have. If you double click the speaker icon in the sys tray, do you get the 'mixer' displayed? If so, do you have line-in checked as the recording source? It also seems that line-in has to be available on the playback side of the mixer for it to work - a trifle confusing. If you can't get anywhere with that little combination, try checking the stereo mixer as the recording source (by the way, I've been able to record streaming audio using the stereo mixer as recording source). I dunno why your tracks etc are greyed out. My method of recording from vinyl, especially lp's, is to check the 'wait for sound before recording' in options and then enter the track names. Start recording the first track and MJ will start when appropriate. At the end of the first track, press stop recording. When you're ready for the next track, start the deck up(actually, you can just leave it running) and MJ will start up again as appropriate. I don't bother with trying to split tracks or enter track lengths. If you don't pre-name the tracks, you can get into a mess as to where the output has gone and then it's gotta be moved and renamed.
I expect you've already tried re-installs and checking on sound drivers etc and I'm sorry I can't help much more than that.
Good luck - Jim