I am using Remote Desktop 7 (the new version that came out with Windows 7) to control a Windows XP Pro machine. I have selected "Record from this computer" in the Remote Audio settings. When I connect to the machine, go to the control panel, open the sound panel, and go to the audio tab, I find that the default sound playback device is "Microsoft RDP Audio Driver". However, there is no default sound recording device.

As expected, my IP phone thinks there is no recording device. If I am sitting in front of the computer with a mic plugged in, it works just fine.

Has anybody else been able to get this work appropriately? Is there anything that I have to setup on the XP machine to get this working?

Thanks in advance.

Edit: As John T pointed out below, you have to be connecting to a Windows 7 Enterprise or Ultimate machine for this to work. I've also found out that Multi-monitor support has the same requirement.