I cannot find any way to record audio period. The button always remains grayed out, and thus isn't usable. I know I should be able to record while doing playback somehow, but I literally can't, even looking for other roundabout ways. I can't even record without playback, either. I'm using 0.4.14 on Windows 7, but I also, from reading the forums, noticed that it exists in some form on the Linux builds as well. Is there even as much as a patch for this (devs seem a little bit too slow to respond, in my opinion)? That would be a lifesaver here.
lmms does not record audio. the buttons are kind of 'placeholders' :p. for a feature that is planned, They are not active.
You can record note-events in piano-roll, and you can do that in additive mode
red-white-black record-button, and you can do it in exclusive-mode: red-white-record-button. Those are the only ways you can 'record' in lmms.
Use audacity, if you want to record.