What exactly are you using this for? Do you really need the audio :p.
If you can see and hear whatever you're trying to capture, but then when you try to capture it, all you get is static for audio, but the video is fine. I would have no clue. :p
But you might want to check your audio recording properties. You can do this by double clicking the little speaker in the lower right of your screen(in the system tray). Then going to the Options|Properties. Put the dot in "Recording", then hit OK. The sliders should change into all the devices you can record from.
With the ATI TV wonder you should have a mini-plug(headphone style connector) cable coming from a port on the TV wonder going to the Line-In on your sound card. Make sure Line-In has the check in it.
You may a want to the open source bt878 drivers :
http://btwincap.sourceforge.net/
Those fix some problems, such as not being able to capture @ higher than 320x240 in vdub...
Goodluck