To clarify a few points here...
1. It has nothing to do with the mic needing power, as insinuated by trainguy. The voltage level coming out of a mic is lower than that in a line level signal. The impedence is also different as well. That means a line level jack is expecting certain electrical characteristics and a mic gives different ones which won't work (usually) with a line level input.
Some mics DO require power (ie a condenser mic that takes phantom power) but these are generally high quality and wouldn't connect using a mini jack. The most common connection type for something like this would be a three-pin balanced XLR.
2. The input on the mac is line level. A line level output is NOT the same as a headphone output. Headphones can go to higher voltages than line level, and a headphone output is designed for a different impedence range than line level. The two are close enough that they will work together, but it's not an optimal situation and for the best sound quality you want all your inputs and outputs to be impedence matched.
3. Macs have very nonstandard interfaces. For example, the "headphone" jack on the ibook is actually a TRRS (tip ring ring sleeve) connector, which has contacts for audio left and right, video, and ground. A normal headphone or stereo line level jack would have three contats (TRS), for left, right, and ground. This can mean that sometimes the assumptions we make when thinking about "normal" audio stuff can lead us astray when dealing with macs.
4. MOST stuff you will deal with that isn't a microphone will be line level. Some examples are electric keyboards, drum machines, some electric guitars, direct boxes, most effects processors, DAT decks, etc etc etc.
The only stuff that is mic level is going to be either a mic or something mic-like (like piezo pickups on an old-school electric guitar).
5. All of this is, at best, a guideline - the circuitry used in good audio equipment is quite sophisticated, and what holds true for one piece of equipment won't neccesarily be true for another. For example, I've used mix boards that, when set to line level, will still work with a mic level input, even though the impedence is wrong and the signal is really weak. I've seen more than one newbie tech crank the hell out of the gain on a channel when all he needed to do was push a button and switch the channel to mic level.