If you are cheap like me, you will plug a Stereo Mini cable from the LINEOUT port on your sound card to the LINEIN port on your sound card, adjust the levels, and go.
I just got Camstudio, easy to use etc. My only setback is not related to Camstudio, it's that all the codecs on my computer are messed up and Windows Movie Maker won't let me import anything into it so I can't edit and create a video.
If you're using Windows XP, the "What You Hear" option has always been available for me. I don't know if this is just because I've always used Sound Blaster and/or Realtek sound processors. However for some reason this is harder to come across on Windows Vista and I think it has something to do with the merge between Vista and sound drivers, rather then giving all the power to the drivers and the driver software. This means Windows Vista has to detect that you support What You Hear, and it often doesn't pick it up. Fortunately though, if you have Vista, then right off the bat you're eligible for using Fraps which is significantly better than any other recording software I've used, so theres really no losing option here, just slightly more constrained. (Aka, Fraps costs $30)
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