I redid it so audacity would work, my other set up, just did not seem to be correct so here is what I did;
I followed this guide;
http://duckzland.ismywebsite.com/about/pulseaudio-and-gentoo/
Mine is a little different as I do not start pulseaudio system wide with;
/etc/init.d/pulseaudio start rc-update add pulseaudio default
[ebuild R ] media-sound/pulseaudio-0.9.15-r51 USE="X alsa asyncns avahi bluetooth caps dbus glib hal oss tcpd -gnome -jack -libsamplerate -lirc (-policykit) -test" 0 kB
And I do use gnome so;
gnome-volume-control
select your input and output devices
gstreamer-properties
select PulseAudio Sound Server
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