Yes, you are correct. I'm not happy with the audio/mic capability in PD7 and until the issue is resolved I don't use that particular feature. I'm hopeful it will be fixed soon.
I record my voice overs in an audio editor (free) and bring that in afterwards. I've actually found it better to do that as I play PD7 and record with the audio editing program at the same time. This allows me to hear what action is taking place in the video while recording a seperate audio file of the voice over. Works for me.
I've sent you a PM .
Honesty disclosure: CyberLink have provided me their software products at no charge.