Is it possible to simultaneously playback the recording device by using the FMOD api? This functionality would be the same to what Windows offers in the recording device properties where you can enable "listen to this device" for certain recording devices. If this isn't possible via FMOD, is there another API more suited for this functionality?
You can achieve this with FMOD by simply recording with looping set to true, then play the recorded sound as looping also. Providing you separate your recordStart call and your playSound call by some time (say 10ms) the play cursor and the record cursor will follow each other and you will get realtime playback.
There is an example of this with the "recording" example that ships in the FMOD API for most platforms and there is a more advanced example on the Windows platform that shows adding realtime effects to a live recorded sound.