1. Open Line in. set the sound input source to line in. (if you are using an iMic then set it to iMic)
2. Open WireTap. Hit record and any sound that is coming out of your computer will be recorded. I play my music on iTunes and have assorted sound clips on Quicktime. Wiretap records them all.
3. When you are finished recording, a new quicktime movie will pop up on your screen. Save it as whatever name you want.
4. If you need to do any editing of the file, then open it up in Audacity or Peak and do your editing. When you are done, save the file.
5. Drag the file into iTunes. Set the iTunes prefs to whatever bitrate you want to convert the file to. (I use 64k, 44.1 stereo
6. Convert the file to mp3. ( I realize this step can be skipped by converting it in Audacity but this is the way I do it)
7. Add any id tags that you need. (important to do if you want people to know what they are listening to.
That is it!
Of course you can get more fancy and use a mixer, etc. but this is a good basic start and is exactly how I did my podcasts from the road.