How can I record any sound playing from my mac and mix tracks?

I just bought a little Nady USB-1C to mess around, there are some audio that's being streamed online as well as some on a DVD that I would like to record to an mp3 format and mix it with the tracks that I made using garage band.

What's the best way to achieve this?

I use Audio Hijack Pro from Rogue Amoeba for this ($32), there's also Wiretap Studio (more expensive but also does more). Google em up and check em out.

thanks chas, i just got wiretap works great!

Noticed that you're from Victoria, we just got back from there last weekend. beautiful city.

Thank you! Yeah, we're having a bit of a cool August though! Hope you had a great time on your visit.