I got a new Compaq CQ57 and an Alesis GuitarLink cable today. Whenever i plug it in, it turns control of the input AND output over to the cable. It works for recording, but I don't appreciate having signal pumped BACK into my guitar. It's bad for the pickups. Is there some way to have only the guitar for input and the laptop speakers for output? all help is appreciated...

I gather this cable is a USB link. Normally there would be a CD with the cable and there should be configuration software on the cd that enables you to turn off the computer output to the usb port
If not then the control panel (sounds) should enable you to do this.
If that fails in large specialist computer stores you can buy devices that either change over or restrict (using a switch) the direction of data flow in usb.
If all else fails you could if you felt happy get a gender bended (M to Female) usb connector cable and undo one end of that and (using internet info) disconnect the out put data wire in the usb plug. (That would be better than messing up the guitar link cable!)