How to record my sets

1.) Why are you using audacity to record your mixes? Do you not own the full version of Serato or Traktor? They offer native recording using your mix output (master output) and yes, the Mixtrack Pro mk1 is supported by traktor with a little configuring with headphone output & whatnot. I have no knowledge of VDJ or any other software, but the MTPmk1 is usually supported.

2.) What do you mean when your second channel isn’t working? Are you trying to use the booth, master or what? I’d say check your connections and just hope it’s something loose or not fully plugged in. If it’s the controller (loose wire inside of it, something broken like the soundcard/motherboard), then start hunting for a new one unless you want to try to fix it yourself. As that basically means your controller is broken assuming it’s not working at all and something is fully snapped in there.

3.) You could, but would lose the ability to use what’s on your controller besides the jogs (the entire center part of your controller minus library selection (Maybe)), and from my understanding, external mixing isn’t supported by Serato, no matter if you’re using DJ or Intro. I know traktor supports it, but only with the full software.

Full version of Serato will allow you to record the mix straight from Serato, so no need to run cables or anything.

The input on your laptop is often set for mic input, not line. Mics have far lower input levels than line, so things will start to distort easily and sound will stink. A separate sound card, could solve that problem.

This is what the manual says about the two outputs on the mk1:
29. OUTPUT 1 (RCA) – This stereo RCA connection will output the Master Mix from your computer.
Please use a stereo RCA cable to connect this output to a powered speaker or amplifier system.
30. OUTPUT 2 (RCA) – This stereo RCA connection will output the Cue Channel from your computer for
monitoring purposes.

In order to record AND hook up your speakers to master out (output 1) you’d need either a splitter cable (not DJ splitter, but regular) or – alternatively – use an inline recording device like the Reloop Tape. In that case you don’t need to use the mic input on your laptop either and you can easily take it with you if you play out (even on the house setup of the venue). This is only one example, there are other options, but just to give you an idea.