My MacBook Pro is running 10.5.8. I use my Line-In port on a daily basis, and I've not noticed any hiccups whatsoever. Did you switch audio input drivers in something like Garageband? Have you tried restarting the machine? Have you been able to get any sound coming in at all? On another note, what does Digital In do for you? What are you trying to use the input for? The info may help us reach a conclusion.
I use a little utility called LineIn to route incoming audio straight through my speakers. I like it; it gets audio out of my Xbox for me hearing pleasure, so to speak. Why not download it and see if it registers any audio levels on its little meter? It's a bit late, so forgive me if my simplistic method doesn't work. Good luck.
Power PC 17" Powerbook, 1.67 speed, 1GB Ram, 9GB available, stay up with all updates...all of a sudden only Internal Microphone and Digital In appear. Did Permissions before and after update, tested with plugs in and plugs out of line in and line out, so Whassup?