Check the following points:

Instead of plugging whatever into your computer, plug it into your speakers to ensure you're actually sending an audio signal to your computer.

Check your computer is actually picking up the incoming signal. If you post back with details of what OS and soundcard you've got you'll get more info on how to do this.

Edit the Sound Forge options to accept audio from the right source (Options->Preferences->Wave and check the Record setting).

and make sure your line input isnt muted in control panel or soemthing

i got a question about soundforge... I use it to record too, but when i do the recording and everything is REALLY loud making it sound REALLY nasty. i try to turn down the volume on everything i can, but it still likes to peak high up into the red.

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Ya my control panel is fine, and my transmit is ok because i plugged it into MIC and its going through (sounds really distorted though). I changed the setting in soundforge, but that hasnt helped.

Have you tried recording using the Windows Sound Recorder program? Just to make sure it works...

Finally, do other things you play on your computer sound ok? Is Sound Forge trying to play back through the wrong output?