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Audio output works fine for me in Windows XP, but I'm getting no audio input. (Both work fine in the OS X host, which is Lion.)

The User Manual says support for audio input was added in version 3.2.0. I'm running 4.1.6.

Anybody have this setup working? Anything I can do to diagnose/address it? I've experimented with the different drivers and controllers, and the only one that seems to work at all is CoreAudio with ICH AC97.

This is usually addressed in the Windows XP guest. CoreAudio with ICH AC97 is the proper one.
I have gotten the Mic to work in XP, but with some coaxing.

Hi dlsmith,
Were you able to make it work?
I had the same problem. In my case Windows 7 (64) host and XP guest.
I searched and came to an old post in this forum.. someone named echopapa posted that if "line in" was enabled, it would work.. and work it did in my case.
HIH,

Frank (from the devteam) said in a recent message that VMs only have one audio input, so line-in or mic-in is the same thing. It's not a feature I care about, so I don't know the details. Depending on how it was done you might need either or both to be enabled. It should be a quick thing to try.