Maybe I'm a little late to the game here, but a search of the forums showed that no solution had really been found for the iMic/muted speaker problem. Griffin Technologies sent me the missing (from their website) iMic control panel(s)- there are two depending on your model. I installed the appropriate one and now I can hear the source material through the headphones, with a bit of delay.
If anybody wants these control panels PM or e-mail me (valvashon at comcast.net) and I will send you the appropriate one depending on your model (do a System Profile and it will show what version of iMic you have).
I also found a solution for the recording dropout problem. I found that Simple Sound records with no dropouts. I know that it isn't the best program, but it works well enough, especially if you record in "CD quality". After saving the simple sound file, I open it once with SoundApp PPC and then I can open and edit the file with Felt Tip Sound Studio. It's the program that I'm familiar with, but it doesn't record without dropouts.
My goal in all of this is/was to be able to record a stage musical 100% wireless (iBook, powered stereo microphone and battery powered mic to line amplifiers) in order to get away from the power line buzz in the dump of a theatre I'll be working in. I'll post the results if anybody is interested.
Val
P.S.- all of the above is in reference to OS 9.2.2. Haven't upgraded to X yet
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