Ambrosia Software, Inc. — utilities/freebies
From the makers of Snapz Pro X screen recorder software.
This explains it all:
WireTap is a free product for MacOS X 10.2 or later that allows you to record any audio playing on your Mac, saving it to a file for later listening or processing. This allows you to record news from Internet radio stations such as the BBC News, sound snippets from your favorite DVD movie, record the audio from a game, or even iChatAV conversations.
WireTap works using a simple tape recorder-like interface. Simply click the record button, and any audio playing through your Mac will be recorded to disk. WireTap can record any sound that is playing regardless of the source, so RealPlayer, iTunes, DVD Player, Windows Media Player, etc. are all supported.