Double check the VATSIM ID and password are correct at the top of the Audio for VATSIM (AFV) dialog box.
Are the microphone and Output Devices set to appropriate sources? E.g. are you using a headset? Turn up their volume sliders.
The COM radio in your aircraft also has to be set accordingly. E.g. stick with COM1 as a starter, select COM1 in the aircraft.
Use the Windows’ Sound Control Panel to check if your microphone (i.e., recording device) is actually functioning.
I left the “X-Plane IP Address” at its default (127.0.0.1), and it works for me.
If you locate your plane to an airport with an active ATIS broadcast, there’d be a continuously playing sound track for you to troubleshoot with (the listening part at least).