What entries show up in the Audio drop down list in iCamSource, and which one are you selecting? There is usually an audio line-in by default, in addition to the mic from your webcam. If you select the line-in when there isn't a mic plugged into the microphone jack on your computer, you'll just hear a hiss.
If you are selecting the correct entry in the Audio drop down list, then the other possibility is that the volume level for the microphone is set too low in Vista's audio settings.
