What's up with my Audio Input?

Okay, this problem is not only affecting my G4 PowerMac, but my G4 Ti Powerbook as well... When I open Sound in the Sys Prefs and select the audio line-in, it shows a signal coming in, but I can't hear anything coming out of my speakers. It does this for both of my Macs... I want to run the sound from my Xbox 360 (running red/white coax into an adapter so that I can plug it into a 1/8" phone jack) into my PowerMac, then have the speaker/headphone jack out running into my Logitech Z-3e speakers, but there's no sound coming out. Any ideas? Both are running OS X 10.4.7, specs of each in my sig.

What do you have selected for Sound Out?

The only thing that shows up on my Powermac is "internal speaker" ... It does have a mic/line-in jack, and a headphone/speaker output jack...

The system is not recognizing the Headphone Jack as a valid line out for some reason. Have you verified you don't have the in and out cables reversed?

Yeah, the cable are good.. I just got this Powermac yesterday. It had 10.2 on it, but I put 10.4 on it and it's all upgraded to the latest version. There's only 2 ports.. One with a pic of a Mic for mic/line in, and the other one has an icon that looks like the speaker in the menu bar without the actual speaker part. The audio out works on my speakers.