You can do it with QuickTime X, which comes with Snow Leopard
That doesn't record sound though.
I think he/she wants to record the sound from the system, like if you recorded yourself watching a video on youtube, the recording would include the youtube sound.
Heh, what about running an 1/8" cable from audio out to audio in on the Mac? With a headphone splitter you could also listen to it at the same time too!