I've been struggling getting audio to work for the past our. I finally found out what was wrong... 

I have a number of machine that all need to record from their line-in input. The system administrator already set-up two machines but I needen third one. Somehow I did not get it to record the line-in by recording from the /dev/dsp device, even after I double-checked all alsamixer settings. I could hear the music passing through via the speaker out though!

 Finally I found out that the way to indicate what channel to capture was to use the "alsamixer -V capture" command. By using the space bar you can select what input will be used for capturing.