The system audio settings works perfectly for me but that's with no mic attached so I don't know if that would make a difference.
My minor gripe is that the mouse pointer is recorded no matter whether it's visible on screen or not e.g. watching TV in my browser full screen after a few seconds tha pointer disappears. It is still recorded by 'Screen Recorder" even though it's not visible on screen. It doesn't make a difference whether the option to record an .mrk file is selected or not and I would have thought that de-selecting that option should prevent the pointer from being included in the 'grab'. If you aren't recording clicks why record the mouse pointer?
Nevertheless, in general I think that it works very well as an initial release that might perhaps be improved over time.