Need to record audio internally, not through the microphone

You shouldn't need 2 devices. Replay can record audio using your sound card.
I followed the instructions here to enable "Stereo Mix". Once enabled you can use it to record through replay.  One thing to note, if you are using a headset, your soundcard isn't active. On my laptop, the sound must be coming from the built in speakers. Once I plug in a headset, I can hear through them fine, but there is no longer anything passing through my soundcard to record.