Audio Driver Error?

Please can anyone help with the running of guitar tracks pro 3? i bought it a few days ago and havent even been able to do a basic record yet. All seemed ok on the 'mixer' page, but the programme does not seem to pick up my guitar, even though i can here it thru my speakers.

When i first install the GTP3 a little box comes up saying ''Audio Drive Error, they do not support the current audio format, or are in use by another application. Please choose whether you want to disable them or use them anyway''. In the box below this writing is 'modem #0 line Playback' and 'modem #0 line record'. Could this be to do with my problem? and if so how do i change this?

Again, please could someone help, all i want to do is record a couple of tracks and am being driven towards insanity. Thanks