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Audio Capture Problem - Loud Hiss Only - Details / Log file enclosed

I'm having a problem with capturing Audio. I'm trying to use the internal mic, but all that is recording is a loud hiss.

1) Not a problem with the hardware - it captures both audio and video fine in iMovie.
2) Soundflower was previously insalled through ishowU but I uninstalled it - no change.
3) The problem is at the capture stage - not the export stage - the .mov file in the project file has the same problem with the audio.
4) Using the Silverback Demo version - OS X 10.5.6 - Late 2006 Macbook Core 2 Duo 2.0Ghz
5) Input is set correctly in OS X Preferences
6) Also tried using an internal mic - just hissing....

Log file here

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