Some computers will allow you to select the Stereo Mix as the recording input -- this is what you want. It all depends on the audio driver and what it exposes to Windows.

Otherwise you can use a splitter cable from the line/speaker output to go to both your speakers and loopback to your line-in and record that. If you do that, you will have to mute the Line-In on the playback mixer or you will get terrible sounds...

Youll have to adjust the audio levels of both the playback and record to get a get level. You want it to be in the middle most of the time, with a few peaks up to 90-95%, but never over 99% or you will get distortion. I tend to keep the playback level as high as possible and the record level as low as possible to give the best recording level -- this gives the lowest noise levels.

There is software for purchase at www.dak.com that will record streaming audio from the internet directly to your hard drive, although I dont know in what format. Its called the "I Wish Internet Recorder" and its part of their analog to mp3 conversion kits they sell.