No it doesn't support "Stereo Mix" or "Wave". Creative Labs has removed that ability to stay within DRM (Digital Rights Management). Basically they're trying to eliminate the ability to record copyrighted music into an .mp3 or .wav stored on your PC.
The only thing I've found that works (half @ss) is using the latest Vista driver from Creative Labs. But that limits the functionality of the sound card. Also it can create errors because it's not for Windows 7.
Creative Labs uses the same driver for pretty much all of their sound cards. Especially the Sound Blaster model.
The Windows XP driver still supports "Stereo Mix" or "Wave" because it's an older driver.
DRM (Digital Rights Management):
http://en.wikipedia.org/wiki/Digital_rights_management