timppu: Is this really true? The only reason I could see for them to prevent this is so that people are not able to digitally record copyrighted music playing in the background etc. So, remove features because they might be misused by the end-user? Logical, and preferable to the corporate bitches, but still an inconvenience to the end-users.
Not really, there are easier way to record protected files than using the "What you ear" record option. The Hardware abstraction layer removal was actually a "feature" of Vista that had plenty of valid technical justifications, like improving stability, making it easier to move the same Windows image between different computers, etc... it was a side effect of the new and actually improved Vista driver model rather than a gesture to please the record industry.
Concerning the record "What you ear" option, it's a sound card feature, not an OS one, some cards still have it under Vista/Seven but honestly I have no idea which ones, mine does actually (The Realtec chipset found on my Asus Maximus V MOBO)
What you can try to do is right click on the "speaker" tray icon and select "Recording Devices".
There right click and make sure that both "Show Disconnected Devices" and "Show Disabled Devices" option are checked.
There check if you have the "What U Ear" option or "Stereo Mix" (as it's called on my PC) device enable it and select it as default recording device.
There is a catch though (at least with my sound chipset) for the "Stereo Mix" to work and be able to record "
what you ear", you have to use an "analog" output, if you use Digital (SPDIF) or Optical output then the "Stereo Mix" won't record anything, but if you plug a speaker or a headphone directly to your sound card output and select this as the default playback device then the "Stereo Mix" option will work correctly.