Soundflower is a Mac OS X system extension that allows applications to pass audio to other applications. Soundflower is easy to use, it simply presents itself as an audio device, allowing any audio application to send and receive audio with no other support needed. Soundflower is free, open-source, and runs on Mac Intel and PPC computers.

Features:

• Applications: Since Soundflower offers a straight forward method of communicating between applications on the Mac, there are a variety of situations where you can employ it.
• Podcasting: Soundflower has been used extensively in podcasting by combining separate streams of audio into one source. Instead of recording an interview with Skype and only hearing one voice, Soundflower lets you publish both voices for a complete interview experience.
• Cellphone: Use an application called DittyBot and Skype to access your iTunes collection from any cellphone.
• Music: Record streaming audio from iTunes into Audacity, or route an audio stream from iTunes to Logic.

Requirements:
OS X 10.9+
Intel

Also available is:
Version 1.6.5 for OS X 10.5+