When choosing the Voice Narration option in Camtasia Studio, the Input Level for the microphone works, but all other options are dimmed or greyed out.
This problem has been resolved for most cases in Camtasia 7.0.0 which can be downloaded here
On some systems with removable audio devices, the options for the audio devices are not properly updated by Camtasia Studio. For Camtasia Studio users with a Realtek sound card, there is also a chance that the voice narration will still be grayed out. This is a problem specific to the actual sound card.
Method 1: For version 4.0.0 - update to v4.0.2
Upgrade your version of Camtasia Studio to the final release of v4.0.2 here
Method 2: For version 4.0.1 or newer - update your sound card drivers
Visit the manufacturer’s website for your sound card. Download and install the most up-to-date drivers for that card to see if this enables the Voice Narration tool.
Method 3: Disable Realtek card to use USB device
In XP: Right click My Computer > Hardware tab > Device Manager > Sound, Video, and Game Controllers and right click your Realtek device and choose Disable.
In Vista & Windows 7: Right click Computer > Properties > Device Manager > Sound, Video and Game Controllers and right click your Realtek device and choose Disable.
**Now plug in a USB mic and restart Camtasia Studio.