download audiohijack pro
http://www.rogueamoeba.com/audiohijackpro/
and then check out this site:
http://www.serialz.to/serialbox.html
for some...ahem...additional information (or actually buy audiohijack, my personal reccomendation)
audiohijack pro rocks, records stuff into AAC, MP3, whatever you want. easy as hell to use.