Finally, I have recorded a conversation with the Skype Lady on my Dell XPS desktop.  I am not going to make you read all the details, but this is what I have received from Dell so I can have the "stereo mix" choice under the recording options. 

Cathy,
Since so far we have not had much luck talking, I will send you a little
information and a link that MAY help with your problem.
First-Dell has elected not to include the options you are looking for,
and as best I can tell it is for copyright reasons (Direct recording
from the WEB-example).  This is not an official reason.
Now, a solution may be found at the following WEB link:

http://downloadfinder.intel.com/scripts-df-external/Detail_Desc.aspx?agr
=N&ProductID=2204&DwnldID=8658&strOSs=44&OSFullName=Windows*%20XP%20Prof
essional&lang=eng

This file should be the best
choice----5.10.5208_XP32_XP64_MCE_2K_AC97FP_IAS.EXE

If that does not work then----5.10.5208_XP32_XP64_MCE_2K_STACGUI.EXE
might work.

The highlighted file was the one that allowed me success.  However, neither file solved the same issue on my Dell Latitude D520 laptop. 

I am really hoping this nice man at Dell is going to find the answer for my laptop.  At the same time, if what he says is true, I think other options for recording both sides of a Skype call will have to be aquired.   

My next step is streaming- I know I am way behind the rest of you....but I will get there :)