best way to record an audio stream?

+1 for audacity - you can also make it record and play at the same time, but I forget how :-(

Aha, it's in preferences - just enable "Software Playthrough" in the Audio I/O in preferences.

Not sure if you'll want to, but I find a lot of people do. :-)
 
Another +1 for Audacity. It's free!

Just select "What U Hear" from the drop down menu next to the volume sliders. Hit record and play whatever it is you want to record. You can then export to MP3, WAV or OGG.
 
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