I try to record sound and it works fine me and my friend do these videos and well he's on skype and we can hear him pretty clearly. But whenever I try to record it has so much background noise and I am not talking about the occasional wheeze of my computer, every second of the video there is fuzz or background noise and even when I don't talk, no fan or anything is going it still pick it up for some reason..?

If you use Windows 7/Vista, uncheck the 'Listen to this device' option under the 'Listen' tab of the 'Microphone properties' window.

It wasn't checked to begin with

Could you send your video file at bandicam@bandisoft.com?
And please tell us your system information (Windows version, sound card, and the like)

Thank you for using Bandicam
Zun