I've used the commercial product Virtual Audio Cable (VAC) for years and it has served me in good stead.
Recently, however, I've had issues attempting to install it on my main, general purpose laptop running Windows 7. The driver just doesn't load, even though it runs on another Windows 7 computer.
I really didn't want to wipe my daily use computer to reinstall the O/S and still have it possibly not work. So I searched around and came across the 'free' product VB-Cable. It's not really free - you get one cable for trial use with no restrictions and if you want up to 2 more (which is really necessary), you have to donate (minimum 5 Euro or around USD$4.25. That's not all that bad, and the product does work, even if it's a bit cumbersome to install with multiple drivers (one for each cable).
So now I have my station running (for test purposes) on my laptop. I haven't noticed it putting any sort of burden on the system some 24 hours later. For those that don't want to spend US$30 for VAC, VB-Cable is certainly a viable option.
[Reposted from another Forum with permission from the author, i.e., me]
I'm preety sure Breakaway Pipeline will work just as well for this and it's free. At first I wasn't sure if it was a stand alone product or not, but apparently it is.
http://www.breakawayone.com/downloads/
You don't need to download "Breakaway One", you just need the "Pipeline" and it does have multiple cables.