4 simple steps

1 - Download Soundflower

2 - Install. Restart. Go to system preferences/sound/ and select sound flower both from input and output
alternatively and much faster you can just press the volume icon in the menu bar while pressing Alt.

3 - In your sound flower applications folder launch Soundflowerbed, in the icon in system menu bar select Soundflower (2ch) output;
you can further tweak settings below, but it is really up to you

4 - Launch Quicktime X, then File/New Audio Recording and from little triangle at right select sound flower input and quality.
Orrrr you can use instead Quicktime pro version, as will allow you to record uncompressed happy audio unicorn files, yeahhh

Extra tit, I mean tip for monitoring or realtime line input
This is the simplest and free also: RogueAmoeba's Line In

And because I really don't want you to remain with unhealthy curiosity, this is the thing I wanted to record :P

it reminded me of a japanese Maria Peszek