-- INTRODUCTION --
I'm going to describe known, good, working methods of creating a multiple sound track overdubbing session in Audacity 1.3. That is, you record one track and then play it and add a second track against it. Drums, guitar, voice. Repeat as needed.
This process requires purpose-built hardware. I will describe a pro XLR microphone amplifier, a stereo line adapter (sound card) and a particular microphone. All three are USB sound devices and can be made to work on Linux, Mac, and Windows.
All three have been hands-on tested.
You will hear a useful, theatrical mix of live performance and the previous tracks in your headphones (also required). This is the step often missing or impaired without purpose-built hardware.
Audacity 1.2 can be forced to work, but is no longer supported and can be unstable on modern computers, so in the spirit of a known, good, working performance, Audacity 1.3 is required.
-- Shure X2U Microphone Amplifier/USB Adapter --
-- Behringer UCA202 Stereo bidirectional USB Sound Card --
-- Samson G-Track USB Microphone --
You can do overdubbing/multitrack in software with careful computer management. The process can take serious commitment in study, time or money, and is never as perfect and simple as with the hardware devices.
You can also try fake overdubbing where you don't hear yourself during the performance.