Download mp3 from this video to put in iTunes?

You could use a program like Piezo to record the audio and save it as an MP3. I'm sure there are other programs like this also, but I recently got Piezo from the app store and it's simple and works well.

 

This is what lots of people use. However if you have an audio cable you can always simply run the output back to the input and record with (say) Garage Band then save it to iTunes.
http://www.rogueamoeba.com/audiohijackpro/

 

FWIW, Piezo comes from the same company as Audio Hijack Pro but has fewer advanced features and costs less than half the price. But it can capture audio from any program running on your Mac. http://www.rogueamoeba.com/piezo/ I think the free demo of either program would work if this is just a one-time thing (they allow 10 minutes of recording).

I agree... analog is another straightforward way to accomplish this kind of thing too.