Is this in TeleFlow Simulator that the problem occurs on the server computer?
If so, is there a sound card and speakers set up on the computer? If you use Sound Recorder (Start >> Programs >> Accessories >> Entertainment >> Sound Recorder), can you record and playback with that on that system?
Our experience with on-board sound cards has been pretty poor, as well. If that is what it is, this may not be something you can solve just by getting the card working under Sound Recorder.
If Simulator is where you are having the problem, but you are intending to run live on this system, I would actually recommend not solving this problem at all... Just proceed to get the hardware all set up and running, and worry only about getting the phone system recording.
If this is a problem in production (on the telephony card when calling in), let us know. Either way, it might help if you could send a complete log (with this error in it) to
support@engenic.com. We will review and respond in this thread.