There are alot of apps that do in-line recording, your referring to recording from a tape desk or external player connected to the soundcard right? From simple recorders to complex ones. such as SAW PRO & Sound Forge.
for a FREE app, similar to the above mentioned apps, you might want to give Audacity a try, its free.
http://audacity.sourceforge.net/


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- plus i'ts open source, and its always good to support open sourrce projects :P

