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If that doesn't work look at your Sounds/Recording settings and make sure the mic is the default input device. Then (IIRC the nano also has audio passthrough) if you are 'monitoring' or using the sound card in your mic for output make sure it is the default Playback device. I suggest using a free utility that will let you toggle through between your default outputs and recording devices with a keyboard shortcut called SoundSwitch, so you don't have to go into your sounds control panel to change default devices.