First off, read the text, don't just look at the pictures!! Push to Talk and Mixer settings
Start the windows mixer by clicking Open mixer on the Input tab (Input Device must be Soundcard).
This opens 2 mixer control windows, one for Play (a.k.a volume control) and one for Record, usually behind it. Find the Recording control.
It sometimes has other names, such as Capture.
Sound levels
Troubleshooting - common problems Test for skipping
There is no need to do this setup until your DJ application is accepted.
This page has setup instructions for Winamp on Windows. If you use mac os or linux, there's still hope.
For Mac you need nicecast,
which is not free. Alternative solutions
for windows exist, such as SAM Broadcaster. If you have this, its better.
First, you need Winamp (version 5.x and 2.7x-2.9x). Winamp
v3 will not work.
Install the Shoutcast
DSP plugin for winamp into Winamp.
Press Ctrl-P (Prefs), then go to plugins/DSP to start or stop it, by selecting the DSP or (none).
Encoder tab. For encoder 1, set MP3, 128 kbps 44kHz, Stereo.
Note: there are two 128 kbps, choose the stereo one.

Output tab. enter like in the pic. The password is given to you by ErrorFM staff after your application is accepted.
Description: enter your DJ name plus maybe a short tagline.
Genre: list all the genres you play. This attracts search hits on www.shoutcast.com. Ex: "Rock,
Alternative, D&B, Hiphop, 80's". Genre must not be blank.
Make sure Enable Title updates is on.

Shoutcast Input tab should look something like this:

If you are using an external mixer, set windows recording mixer correctly, probably Line In, and go to the next section.
If you don't want to use
the mic, set Input Device = winamp, and go to the next section.
But you do? Good. Here's how to hopefully get Push to Talk to work. Be aware that it doesn't
work on all soundcards.
Go to menu Options / Properties. Look for Stereo Mix. It can also be called "Stereo
Out", "Mixed Output", "What U hear", "Record master",
"wave out mix", "mixer" or "Sum" instead.
Turn it on.
It may be missing on some PC's, especially Dell.

Then select it as the recording source. The level slider on it acts as master volume for
the stream.
For Windows Vista, see here how to do this.
In Play control (the other mixer window, a.k.a volume control), make sure Mic isn't muted.
Most people will need to enable "+20 microphone boost" in advanced mixer settings.
If you use speakers, and they're not turned down, you will get mic feedback (howling) when
you press Talk. Test this. Best solution is to use headphones, or a headset with mic.
To avoild puff noises when talking, keep the mic to the side of your mouth.
Voice chat programs like Skype, Teamspeak, AIM/MSN/Yahoo voice chat and some games will change the selection to
Microphone. If you use anything like this, please check Recording mixer before every show.
Warning: any PC sounds will be transmitted when input device is set to soundcard. So beware of AIM,
MSN etc, and Windows sounds, or turn these sounds off.
Test the mic and mp3 switching by pressing Talk. You need a listener for this. If you can't get
it to work, or can't avoid the mic feedback, use Plan B, or get SAM
Broadcaster.
Plan B: Set recording control selection to microphone. Switch shoutcast Input Device between
Winamp (music) and Soundcard for mic, for every time you talk. You don't need to press the Talk
button. Adjust mic level in Recording control / microphone.
Watch your sound levels
with the "Input Levels" meters. They should stay between -1 dB and
-10 dB. They should never hit 0 dB. 0 dB means too loud and it will distort the
sound. You will not hear this on your end. Also watch the meters when talking, for a good mic level. You can always
trust the level on the meters.
To adjust the levels (when not using Plan B): The selected slider in Recording control acts
as master volume.
Fine tune using shoutcast: input tab: Music Level and Mic level. BG Music Level
is for when the Talk button is pressed. Do not mess with the levels in Play control (a.k.a volume control mixer).
Shoutcast is designed to change these for you.
Mic works, but its too low even on max level: In play mixer (a.k.a volume control), enable Advanced in the menus.
Then click Advanced button under Mic. Enable "+20 microphone boost" Mic is still too low, even with "+20 boost" on: Raise level on Stereo mix in Recording mixer. Now music is too loud, so lower it using Music level, or winamp's volume control.
Mic is on, always, no matter what i do. Music isn't getting through: Yank that webcam with built-in mic out. Some USB mics are like this also. If you want to use this mic, go with Plan B
Mic isn't working: Turn off mute in play mixer. Check if there's an on/off switch on the cable. Check where its plugged into the PC, sometimes theres two mic ports.
Check shoutcast input tab: Mic input. I can't connect: You can't connect while another DJ is on. Or the password / address / port is wrong.
Load the kick webpage (which is given to you by staff) in case you need it.
If the previous DJ is live, use IRC chat to agree on when to start. Even in this case you may need to kick
the auto-DJ off. (It tries to connect every 10 seconds.)
Go to the output tab, select Output 1 and push Connect.
Transmission does not end with the last mp3, you must click Disconnect.
Tell any following DJ to start, or just leave it for auto-DJ to take over.
IRC Chat
The current DJ must be in chat
when DJ'ing, and check it for listener feedback. Some listeners will be rude. Just ignore them if
you can, or have a channel op remove them from channel.
Type !efm to get current stream info in channel.
Type !sched to get a compressed schedule for the next few hours.
Type !listeners to get a list of who in chat is listening.

Thank you to meatie for this useless bit of information!