Audio Hijack Pro has been updated to better capture phone conversations. No, the folks at Rogue Amoeba haven't signed up with the NSA. Rather, they've recognized the ongoing interest in recording Voice over Internet Protocol (VoIP) calls, whether computer-to-computer or computer-to-PSTN (Public Switched Telephone Network - you know, the real phone network).
Audio Hijack Pro 2.7 bypasses a fairly wacky setup that I described for O'Reilly Networks last year, and worked with Andy Affleck-Williams to build into his "Take Control of Podcasting on the Mac" ebook, which I edited. Audio Hijack Pro is designed to capture sound from any application or system resource and pass it through. Combining multiple capture streams enables live mixing, and built-in filters enable live processing, too.
The difficulty was, primarily, when recording a podcast or for other purposes, having the sound on a headset's earpiece totally or partially suppressed to avoid echo, while still recording each voice. It was also impossible within Audio Hijack Pro to capture each side of a conversion separately without recording separate audio files and mixing them later in another application.
The newest version, a free update for existing registered users, adds MegaMix, which enables hijacking of both sides of a conversion, with an added option to record each voice separately. Simply creating a stream (Session > New) and choosing a VoIP program handles the details. You can modify the default choice of mixing down both sides of a conversation by clicking Advanced in the Input tab and checking Separate Inputs and Outputs by Channel. (Rogue Amoeba has good illustrations in this blog entry.)
Solutions already exist for several major VoIP programs. Apple's iChat AV can record directly to GarageBand 3, with one track per participant in conference calls. A new plug-in for Skype, Ecamm Network's Call Recorder, enables multiple track recording within that software. The Gizmo Project has long provided direct MP3 recording, too.