Ive found using the stereo Mix of your soundcard to be best.. and you just need any program that can record.
if you have xp here is an example of how to set it up
Otherwise for vista and win 7 its pretty much the same but you might need to download the drivers for you soundcard. and you need to make sure it shows disabled devices and enable stereo mix if its there (here is how to do it in win 7)
then you set what ever program you are using (I use audacity) to use the stereo mix instead of the mic as an input
then you can export it to whatever format you want
