I tried this using the VB Audio Cable instead of VAC (which you should have a link so we can download it because I couldn't find it). When I followed your instructions it was like it turned off the mic. Maybe I'm missing something.
Not a bad tutorial, however Adobe Audition might not be the best solution here even tho I don't know what could be else... For some reason it randomly thinks that even on an i7 processor it has to clog up the whole CPU for a simple echo effect, adds a 20 second delay and so on... Not really nice for a live solution.
While this is a great guide to fixing your sound, I still have some issues with this setup. While most of the time, this works perfectly fine, sometime Au bugs and isn't able to keep the noise-reduction while live. THis bugs the sound and makes even more background-noise than in the first place and makes this entire thing useless.