[sblue]

I am using the MW-12 with Audacity and I had a similar problem (until I read the help in Audacity)

The issue on my Windows machine was in the Control Panel - Sounds and Audio Devices. Until the drivers are loaded you can;t see any thing here, but when it is functioning you need to go to Sounds and Audio Devices - Click on the Audio Tab, Select the Sound Recording device - (Mine just gives me the USB Sound Device) THEN click on the VOLUME button.

The slider volume for the device was positioned very low by default. You can move it all the way to the top (it does not control an amp so you don't clip or distort, unity gain is the best it can do).

Then when you play back thru the MW-12 your 2trk in/USB knob works like you think it should.

I have mine slightly above halfway to get approx equal output from recording/monitoring as I do on play back.